Ola Cabs, the desi competitor to the Uber, has cut its starting share cab price to Rs 3 per km in Mumbai for morning and evening commute.
The fare makes it competitive against share cabs operated by black and yellow taxi operators in the city, who charge Rs 5-10 per ride. The rides are usually along set routes that are about 2-4 km long.
Ola’s share taxi is not confined to set routes, and the company takes advantage of modern technology to find passengers to fill its vehicles optimally.
It should, however, be kept in mind that Ola also charges for “ride time” in addition to the distance. It is not clear whether and how much ride time charges are applicable for the share taxi service.
In its promotion, the cab aggregator said “discounts apply on ride time charges of Rs1/min.”
The company is locked in a fierce battle with US-based Uber. Both offer rides at tariffs as low as Rs 6 per km and are present in most cities in the country.
In comparison, the earlier generation of radio cab operators used to charge Rs 12-16 per km.
Unlike traditional radio cab companies, Ola and Uber work in a partnership model — signing on drivers who bring their own cars. In return for an initial payment of around Rs 10,000 these app-based companies provide the drivers a GPS-enabled phone and other branding and billing facilities.
Cabs are assigned automatically using software, while passengers hail their rides by looking at realtime data of vehicles nearby on their phones.
In addition to cabs, these companies also offer bike rides at Rs 2 per km in select cities.