BackUber’s cash payments move shows its hunger for rapid growth in India
Here are five significant changes Uber has made to its operational model to grow its India business
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Bengaluru: Uber accepting cash payments may sound as strange as online retailer Amazon setting up call centres to take customer orders.
The taxi hailing service announced on Tuesday that it will expand cash payments to four Indian cities, Ahmedabad, Chandigarh, Jaipur and Kochi, two months after it launched a pilot project in Hyderabad to see if it can make cash payments work.
The move to expand cash payments is the latest operational tweak by San Francisco-based Uber to adapt its lean business model to India, which is the company’s second biggest market outside the US. Nowhere else in the company’s 58 markets does it accept cash which, in theory, goes against the so-called frictionless customer experience Uber promises.
Expanding cash payments is likely to boost Uber’s penetration in India, where cash is still the preferred mode of payment for online purchases.
Uber’s move highlights that some international companies have realised they need to make wholesale changes to their operational models if they want to build large businesses in India and compete meaningfully with local rivals.
Uber launched in India in August 2013 with much fanfare, offering expensive rides in Mercedes-Benz S-Class and other luxury cars, charged to customers through direct, automatic deductions on their credit cards stored in the app. Today, a ride on the company’s low-cost offering is sometimes cheaper than one in an auto, which it also offers.
Here are five significant changes Uber has made to its operational model to grow its India business.
September 2014: Slashed prices of UberBlack and UberX by more than 50%.
November 2014: Introduced payments through Paytm wallet, after the Reserve Bank of India (RBI) said the credit card method of payment violated the country’s two-step authentication rule.
November 2014: Launched UberGo, its cheapest offering yet and a service tailored for India.
March 2015: Entered into a “strategic partnership" with Times Internet Ltd, controlled by the country’s largest media company Bennett, Coleman and Co. Ltd. Times Internet invested up to ₹ 100 crore in Uber. The deal potentially gives Uber marketing muscle and much-needed heft in its struggles with local regulators.
April 2015: Launched a pilot project to test cash payments in Hyderabad as well as an auto service, which allows customers to book auto rickshaw rides through their Uber apps.
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