Early Zepto Syndrome for Cab aggregators in India

Cab aggregators like Uber and Ola have been a life saver since they burst onto the scene in India. They eased travel woes by being easily accessible, affordable, and comfortable to move from source to destination. The ability to have a cab booked at your fingertips was the kind of digitization that everyone was looking for to enable easy travelling within cities. India has been blessed with 2 major cab aggregators Ola and Uber who have consistently provided their cab services to the public for inter and intra city rides. On top of that, they have also been a means of livelihood for many people who were bereft of jobs.

The past 2 years have seen a growing resentment by the public against these saviors and has slowly paved way for a Zepto like (quick commerce) scenario where user growth has started calling the shots instead of profitability. We will come to that aspect of Zepto syndrome later, but let’s first understand the reason for growing resentment against Ola and Uber.

The main reason for the public to commute via cabs was owing to ease of access and comfort. Both have been on a decline for the past 2 years as public has had to face the wrath of cancellations and poor-quality cabs served by Ola and Uber. The following reasons can be attributed to the multiple cancellations and poor service.

1. Rising fuel prices: CNG and petrol prices have been on a steep rise over the past 18 months. This has a direct bearing on the cab services as drivers easily spend up to 15000–20000 rupees just on fueling up their cabs. This leads to drivers looking for bookings which will allow them to earn a higher amount as compared to smaller rides which may not be able to reduce the burden of high fuel prices.

2. Drivers having alternate income sources: The pre covid era used to have drivers who were dedicatedly working for Uber or Ola. With the advent of the pandemic, the drivers have found other alternate income sources to eliminate the uncertainties associated with the pandemic. This has led to drivers not maintaining the cab as desired owing to lower level of attachment to the job. Similarly, they end up rejecting or cancelling the booking which they do not deem to be useful for their revenue generation.

3. Urban development + Heavy Traffic: The heavy development and increasing population density in major cities in the world has led to immense traffic everywhere. This makes the drivers resistant to going to such places as it would consume more of their time for the same amount of money. This, in turn, leads to more cancellations as drivers prefer to wait for bookings for longer distances.

4. Pain of EMI: Inflation is never ending, and EMI is an ongoing stigma that is associated with the drivers who drive the Uber and Ola cabs. They are ultimately driving their owner cars and not something provided by Ola and Uber. This pressure of closing down on the EMI leads to drivers selectively choosing the rides they want to serve, and this causes multiple cancellations.

Cab service is essential to the public and the misogynies of Ola and Uber has led to a situation where new players can enter the market and capture the market share. While the market share still resides with these 2 giants, there is one player who has the potential to cause a similar headache that Zepto caused to Swiggy. BluSmart is an electric vehicle-based cab aggregator which is taking India by storm (only in Delhi for now) by providing electric cabs with ease of access and affordability coupled with high quality service.

BluSmart has gone a long way in terms of user growth by providing services with lesser cancellations, lower surge prices and putting less pressure on the drivers by providing them with electric vehicles instead of asking them to purchase their own vehicles. BluSmart’ s arrival is a blessing in disguise during this season of rising fuel prices.

BluSmart is not there yet, but it has been constantly increasing its fleet of vehicles and has now expanded from Delhi to Bangalore. Only time will tell if it also goes the Ola/Uber route of poor service and cancellations, or it will be able to sustain its high quality service as the market for electric vehicles pick up and more manufacturers come up with electric vehicles in India apart from Tata.

Special mention to Richa Ohri for sharing her insights.