Every Indian marketing analyst has one question in mind.
What’s the next big thing in India’s Internet marketplace after online retailers Flipkart and Snapdeal? Investors are betting that it could well be an on-demand taxi hailing service.
Companies such as Ola, TaxiForSure, Uber and Meru are experiencing a boom in demand for their cab services in a country where the transport infrastructure is still creaky and safe public and private commuting options are few.
A shift in consumer habits towards convenience and on-demand services, and, most crucially, low prices, have fuelled the boom.
“These days, the first thing a college graduate wants is the latest gadget rather than a car. Such shifts in consumer habits including the growing preference for convenience and use of smartphones for buying goods and services are helping the industry grow exponentially,”
Ola and Uber, in particular, have grown explosively over the past year by offering car rides at prices lower than the fares charged by auto rickshaws. How long can such prices be sustained for is anyone’s guess, but for now these companies continue to spend massive amounts of capital on marketing, discounts, recruiting thousands of new drivers and expanding into new markets.