Nikita \n Garia, Mihir Dalal, MINT (A Wall Street Journal Partner)<\/i><\/p>\n
New \n Delhi, 26 June 2014<\/i><\/p>\n
Cab \n services provider Uber announced the launch of its low-cost cab \n brand UberX in Bangalore, New Delhi and Hyderabad to directly \n compete with local rivals such as Meru Cabs, Ola Cabs and others. \n <\/p>\n
Uber launched in India last August with its higher priced, luxury \n car service, UberBLACK that charged a minimum of Rs.250 per ride. \n Though the company, which accepts payments only through credit \n cards, reduced fares later, they were still at least 50% higher, \n on average, than those of rivals such as Meru Cabs and Ola Cabs. \n <\/p>\n
UberX will offer a base fare of Rs.50, and also charge Rs.1 per \n minute and Rs.15 per kilometre. The charges will vary based on \n the city, but the fares are similar to those offered by local \n rivals. <\/p>\n
Analysts said the move by Uber reflects the need for brands to \n offer lower-cost but so-called \u201cvalue\u201d products that \n Indian consumers typically prefer. Foreign companies such as Amazon, \n McDonald\u2019s and others have had to approach India as a distinct \n market and \u201clocalize\u201d their products and services to \n appeal to Indian shoppers. <\/p>\n
“We are a cost and value-conscious country. Value is \n more than low cost,”said Devangshu Dutta, chief executive \n at Third Eyesight, a consultancy. “Our service expectations \n are very high. Any company which is looking at the Indian market \n whether it is a product or service company, has to modify its \n approach, adopt different strategies and tactics to make its Indian \n business a success.”<\/b><\/p>\n
Despite launching a lower-priced service, Uber still misses out \n on a significant part of the market as credit card usage is low \n in India and a majority of customers still prefer paying cash, \n an executive at an Uber rival said. <\/p>\n
\u201cUber has only a credit card-based mobile app and no call \n centres,\u201d said Aprameya Radhakrishna, co-founder, of TaxiForSure.com. \n \u201cYou can only go for immediate bookings. So they will have \n limited reach in the market. Let us see how they perform once \n they get into the lower end of the market.\u201d <\/p>\n
Uber is running a promotional campaign to boost sales, where \n a first-time user can get Rs.500 off on the first UberX ride. \n <\/p>\n
The Google Inc.-backed start-up that started its operations in \n 2009 is present in 39 countries. In India it offers its services \n in Bangalore, New Delhi, Hyderabad, Chennai, Mumbai and Pune. \n <\/p>\n
Uber, which does not own cars, uses state-of-the-art technology \n to connect drivers with passengers through a mobile app. <\/p>\n
The radio taxi market is moving towards an asset-light model \n where websites such as TaxiForSure.com lend their brand to drivers \n and cab operators in exchange for a fee. Meru, too, has become \n part cab operator, part marketer.<\/p>\n