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Can e-rickshaws really help Ola in its battle against Uber?

Sanghamitra Kar
12th Jul 2016
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Amidst the fierce ongoing competition between Ola and Uber, Ola has announced the launch of electric-rickshaws in Lucknow which will now be available via their app. The initiative was earlier launched in Delhi-NCR, where it was inaugurated by PM Narendra Modi, in April 2016. 

The company further plans to on-board more than 300 e-rickshaws over the next three months. 

YourStory-Ola-Modi
Ola Co-founder Bhavish Aggarwal with PM Narendra Modi during the launch of e-rickshaws in April

The company has made it further convenient for the drivers by making the app available in 8 Indian languages including English, Hindi, Bengali, Gujarati, Kannada, Marathi, Tamil and Telugu. All the e-rickshaw driver-partners on the Ola app will go through a KYC verification and training before serving the customers.

E-rickshaws have been made available in Lucknow at Rs 20 for the first kilometre and Rs 8 per km post-that.

The Motor Vehicles Act 1989, which was amended in March 2014, now includes incorporated e-rickshaws as vehicles. The act was once again amended in March 2015, which mandated an approval by the International Centre for Automotive Technology (ICAT) or the Automotive Research Association of India. According to the Telegraph, the number of ICAT-approved e-rickshaws in April 2016, were 280.

Ola now dominates the Indian market among the cab aggregators. On the other hand, with a valuation of $68 billion, Uber has been raising its investments and slashing prices in the Indian market with the intent of grabbing a larger market share. This seems to be working well for the global taxi aggregator, which is steadily growing its market share in India. According to sources, Uber has a 50 percent market share of the online taxi aggregation space.

After an intense war of slashing prices, cab aggregators are now focusing on differentiation. Ola, for instance, has launched luxury service, out-station trips and rental service. Earlier Ola and Uber had launched car-pooling services. The e-rickshaw service is just the latest initiative. 

Although, Ola is the first cab aggregator to come up with e-rickshaw hailing service,  Gurgaon-based Treasure Vase Ventures (TVV) has launched the Smart Electric Transport System (Smart-E). It is a ride-share model and provides services like travelling to and from metro rail stations. In collaboration with a number of banks, loans are arranged for the e-rickshaw drivers to buy the vehicle. 

Now that city transport authorities are cracking down on surge and peak pricing, all taxi aggregators will definitely have to look at new offerings for their customers. For Ola particularly, will initiatives like e-rickshaws be enough to keep the competition from the well-funded Uber at bay? 

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