“The world is built on stolen ideas that are implemented aggressively” – Unknown
I had heard this business mantra long ago, and while my study of Facebook, McDonalds made me see the wisdom in this, it’s only when I saw it in action in India that I understood the real astuteness of this line.
Uber debuted in India in 2013. By then it had already captured the imagination of the world. To me Uber was the ultimate idea of freedom. It made me feel like a local in every part of the world, in a way that Airbnb advertises. No more uncertainty over finding a cab anywhere in the world, no more annoyance over tips (US), no more language barrier (Saudi Arabia), no more haggling over fare prices (Egypt), no more dependency on public transport outside city limits (London), no more fear of being mugged by your cab driver (ahem..), no more waiting in cab lines during rush hour (UAE), no more headache about getting from anywhere to anywhere, in a cab (India). Nothing in the world could beat Uber.
And then there was Ola, the poor cousin of Uber. They debuted in India in 2010, one year after Uber launched in US, but considerably before Uber moved to India. It was Uber that brought the charm offensive to the status obsessed millennial. And even though Ola couldn’t capture the minds of the people immediately, Ola knew something that Uber did not – being first is not everything. When it comes to winning in business, strategy is the ultimate king. And Ola had its fingers on the pulse of the Indian market. Once Uber sold the idea of ride sharing, Ola changed gears. An aggressive deep discount approach got it the attention and traction it needed. And once they had the customer base, it's was time to race ahead – a customer service not hidden behind emails, cash payment, auto rides, sharing rides, express sharing, OTP for starting rides, pre booking service, easier discount application, walk in airport cab service, the list goes on. They even have bike rides in Gurgaon!! It seems to me every time I step off a flight and open the Ola app, they have done something new.
Uber it seems has been playing catch up since Ola arrived on the scene. They are like the child in the back seat of your car, pretend driving and under the belief that they have control over the ride, but really just following the direction of the actual driver.
And things haven’t been smooth in other geographies either for Uber. Lyft was already chasing Uber in the US market. Fortunately for Uber, they were not able to do much damage. South Asian player Grab has bought out Uber in eight countries of Asia. Didi Chuxing and Uber already merged in China, where Uber was losing considerable money. So India is the only Asian market where Uber is still holding on. Careem in middle east is giving them a run for their money. And all these regional players are expanding in other markets. No more is any of the regional player’s content with their regional tag. Careem is moving to India while Ola is moving to Australia.
So what’s next for Uber. Will they get off their high horse and understand their customers or will they let others take over their domain. The way things have been going so far, it seems to be the latter. At the rate it’s going, Uber will soon be a species only to be seen in USA. With Softbank owning stakes in both Ola and Uber, the merger talks are already doing the rounds. Uber is losing money in India and it remains to be seen how long Softbank can continue to fund this bottom less deal. Unfortunately, that doesn’t spell good news either for Uber or for the Indian customers. Indian customers want to get the best buck for their money. And a monopoly market is not what leads to price drop. With Uber out of their way, Ola would be free to price their service in a way, that leads to the billion dollar pay day they have been waiting for.
What does it mean for now? Nothing. Let the businesses do what they do – merge and remerge as required. Ola may not be able to make Uber go away from India, which would keep them competitive. If they do take over Uber, their prices will increase. But it won’t be for long. Business markets are resilient. Whenever someone tries to take advantage of their monopoly situation, market has a way of balancing itself out. Even in high barrier entry market like airlines, Deccan did what everyone thought was impossible. Ride hailing & sharing app is still on the ground. There is always a new company on the horizon, that keeps the bigger brands in check.