Uber and Ola fares to increase?

Uber and ola

Uber and Ola to hike prices

Looks like this is going to be the beginning of higher prices for taxi rides in India.

With two big players Uber and Ola battling out governments about surge pricing and eventually loosing out, is the sign that taxi aggregators are going to increase the fares to even out losses.

Ola and Uber are currently losing between Rs 150-200 on each ride. Though they have reduced incentives to the drivers they are not able to increase the pricing because of competition. Surge pricing was the only way for the taxi aggregators to make little money.

With the Delhi government winning the battle with taxi aggregators to withdraw surge pricing, it is evident that the same is going to be applicable eventually across India.

In this current scenario of providing rides at Rs 6 or 7 per Km will not be feasible unless they make money on surge pricing.

Whenever this kind of scenario happens in any of the industries both the competitors discuss and come up with a revised pricing structure to reduce losses.

The signs are evident that the cheap travel  options will not be available in coming days and customers have to shell out more from their pocket for taxi rides.

In a long run this a good sign for investors and founders of both the companies as they will control the pricing. However there will be a challenge with transport regulation act of each state, where there is predefined fixed pricing per kilometer. In such a case the driver will be the looser as “Incentives Times” will be over.

Apart from present challenges like appointing quality drivers for greater customer experience, screening drivers based on their track records, enforcing policies for passenger safety, cut costs to provide a competitive fare, the new big challenge for taxi aggregators is to revise fare prices without losing market share.

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