On 21 March, as India began shutting down to combat the deadly Covid-19, Ola and Uber, the country’s two largest ride-hailing companies, paused their ride-share services to help slow the spread of the virus.
That was just the beginning. Within the next couple of days, the entire gamut of services offered by ride-hailing companies—from cabs, and autos to two-wheelers; short rides and day rentals to out-of-city rides—were all stopped. India’s vibrant mobility start-up ecosystem came to a grinding halt. And the pool service, the first mobility casualty of Covid-19, might be the last to recover.
Ride-hailing companies sold the idea of sharing cab space with strangers as a way to fix problems facing rising megacities—congestion and pollution. It was also an excellent route for market acquisition. But the service didn’t exactly work out the way companies intended it to. “One of the reasons pool services have not really taken off in India is because of [a] general trust deficit between people,” said Kunal Khattar, venture capitalist and co-founder of Advantage Capital, which has invested in ride-hailing companies Shuttl and Rapido.
The companies’ approach to pooling frustrated all three stakeholders—passengers, drivers, and ride-hailing companies. Passengers didn’t like it because they ended up with detours and unpredictable ride times. Drivers didn’t like it because it was a lot of bother for very little money. And the companies weren’t happy because, as one senior executive from Uber put it, “it was impossible to make money from it.”
According to a former senior executive from Ola, these rides roughly constituted 10% of Ola’s overall GMV GMV Gross Merchandise Value Gross merchandise value is often used to determine the health of an e-commerce site's business because its revenue will be a function of gross merchandise sold and fees charged. in India. They also comprised only 15% of Ola’s total rides, lagging behind Uber’s worldwide average of 20%.
Those numbers might drop further if the stigma associated with sharing cab rides with strangers lingers after Covid-19. Consumer behaviour towards shared mobility will change. “It is a huge threat to the category,” admitted the former senior executive from Ola quoted above.
To make matters worse, competitors are moving in on Ola and Uber’s space. Companies like Quickride and Redbus’ rPool—carpooling apps for anyone who owns a car—all-electric cab company Lithium, and office cab aggregators like Move-in-Sync, and Routematics are slowly capturing the daily office-going commuter crowd that pool was targeting.
These firms are also better placed to weather the crisis out; they are cheaper and provide more security than a normal ride-share would.