Uber is pouring in $1 billion (Rs 6,400 crore) into its indian operations to beef up its operations in the face of stiff competition from homegrown rival Ola. Uber has also set itself an ambitious target. “With this investment and the strong rate of growth we are seeing, we expect to hit over 1 million trips per day in the next six to nine months,” said Amit Jain, President, Uber India. Uber’s drivers in China are already closing in on this target. The taxi hailing app currently offers around 2,00,000 daily rides and the service is growing 40 percent month-on-month.
Uber’s investment in India follows the same in China, where it put in $1 billion to grab market share away from market leader Didi Kuaidi, which is funded by Alibaba and Tencent. “We are extremely bullish on the Indian market and see tremendous potential here. India is one of Uber’s big priorities, along with China and uberPOOL,” said Jain. Uber, valued at $50 billion, is now present in eighteen cities in India, making its coverage larger than in China and the UK, and second only to the U.S. And India is the only country where Uber allows customers to pay by cash in certain cities.
Much of the funding will go into expanding into more cities, developing new products and payment solutions, and establishing a wider support network. Part of the funding will also be spent in subsidies to cover the discounts it offers passengers, and incentives for new drivers to sign up with the service. The lowest fare is down to Rs 7 per kilometre in Delhi, which makes cabs a viable alternative to three-wheeler auto rickshaws, and a cheaper means of transport than owning a car. The opportunity in India is huge because most cities have unorganised cab services and not enough cars to meet demand.