Bengaluru: Uber Technologies Inc. inched ahead of rival Ola in March on the basis of app downloads in the seven biggest cities, indicating that Ola may be losing ground to the American company in the race to dominate India’s cab-hailing market, according to a report by research firm KalaGato Pte Ltd.
Uber accounted for 47.3% of all cab- hailing apps installed, higher than the 43.7% for Ola, at the end of March, according to data from KalaGato. Other cab-hailing apps such as Meru account for the rest of the market. The study took into account app downloads in seven cities: Delhi, Mumbai, Bengaluru, Chennai, Hyderabad, Pune and Ahmedabad.
To be sure, Ola (ANI Technologies Pvt. Ltd) operates in 110 Indian cities as against Uber’s 29. The report only reflects the app downloads in the seven cities and not the market share in terms of number of rides or value of the rides. But the data clearly indicates that Uber is gaining ground on Ola. Both companies generate more than 80% of their business from the top 10 cities.
According to KalaGato, Ola had a comfortable lead over Uber in app downloads until a year ago. In May 2016, Ola accounted for 54% of all downloads of cab-hailing apps, compared with 34% for Uber. The San Francisco-based company has since stepped on the gas, especially since January this year—by which time its share had risen to 41.5%.
Uber and Ola differ over who controls how much of the market. Uber’s Asia business president Eric Alexander claimed in March last year that Uber is “right at the edge of 50% (market share). I would say that within the next 30 days, we would beat them (Ola).” In April, Ola claimed that its cheapest offering, Micro, was bigger than all of Uber’s India business.
Ola executives and investors claim that Uber, currently, is less than half of Ola’s size while Uber executives claim that it is slightly bigger than Ola. There is no conclusive way of checking either claim.
Uber threw its might behind India about the same time it sold its China business to local rival Didi Chuxing last year. Meanwhile, India, which barely registered as a blip in the global market for cab aggregators (in terms of rides) in the first quarter of 2014, had grown into the third-biggest market after China and North America by the first quarter of 2016, according to the Internet Trends-2016 report by Mary Meeker, partner at Silicon Valley venture capital firm Kleiner Perkins Caufield and Byers.
Soon after the sale of its China business, Uber India president Amit Jain indicated that Uber would focus sharply on India. Jain claimed in an interview to Mint in September that Uber’s completed trips had risen from 165,000 a week in January 2015 to 5.5 million at the end of August.
According to data available with KalaGato, the median ride value at Uber at Rs127 is marginally lower than Ola’s Rs135. It further suggests that 41% of all Uber rides are priced less than Rs100, and that only 12.5% bring in more than Rs300. The corresponding numbers for Ola are 31.4% and 16% respectively.
An Ola consumer books an average of 2.5-3.5 rides per month, while an Uber one does 3.9-4.9.
“Uber is becoming a habit, it’s changing the way you and I commute and how we think of car ownership. Ola is still basically a taxi service,” said Aman Kumar, chief business officer at KalaGato. “Uber does a higher percentage of its rides below Rs100. This could mean one of three things: Uber is pricing lower than Ola and that is paying off; people use Uber a lot more for shorter trips, which means it’s becoming a habit; or Ola isn’t available as much so people are choosing Uber.”
Uber, which has so far raised about $12 billion from investors, has a higher capacity to spend on discounts to consumers and incentives to drivers compared with Ola.
Ola has secured close to $350 million from its largest investor SoftBank Group Corp., Ratan Tata’s RNT Capital Advisers and Falcon Edge in its latest funding round, which valued the company at $3-3.5 billion as against its peak valuation of $5 billion in 2015. Since starting out in 2010, Ola has raised $1.6 billion, the fourth highest by any Indian start-up.
Ola didn’t respond to an email seeking comment on KalaGato’s data.
An Uber spokesperson said in an email response, “Our business in India is healthy, growing and on a strong trajectory and we are seeing strong and sustainable growth in the 29 cities we operate in. Drivers across cities continue to join the platform to get entrepreneurial work at the tap of the app and we are very happy with the progress we are making.”