Three wheels, an unmistakable sputtering sound, and the ability to navigate the narrowest of lanes—the auto-rickshaw or ‘auto’ is ubiquitous to Indian roads. Even many Southeast Asian roads (think: Tuk-tuks), for that matter.
The humble auto is colourful, has character, is convenient, but isn’t comfy. And that’s where air-conditioned cabs and ride-hailing companies such as Uber and Ola traditionally come in. To offer the comfort and safety of a car, minus the heat and dust of the outside world. So why, then, have these companies entered the auto category?
Because ride-hailing is no longer the hot market it was 10 years ago, when Ola and Uber set up in India. In fact, US-based private equity firm Vanguard downgraded ride-hailing giant Ola’s valuation to $3 billion from $3.3 billion just a few weeks ago. Ola was valued north of $6 billion before the pandemic.
Air-conditioning and rolled-up windows are not a luxury but a real threat in the post-pandemic world.
And guess what type of vehicle doesn’t have that problem? “With fewer physical touchpoints and better air circulation, along with mandatory masking, autos are perceived as a comparatively safer way to get around. Our ongoing investments to install safety screens in over 140,000 autos is helping reinforce this confidence,” said an Uber spokesperson in an email response to The Ken.
“Auto is recovering strongly across the country and gross bookings from the category now exceed pre-Covid levels,” they added.
According to Tanveer Pasha, chief of Ola and Uber cab drivers association of Karnataka, there are around 150,000 autos running in Bengaluru, of which only 60,000 ply on Ola and Uber’s platforms. There is still a market to capture for ride-hailing companies—both in terms of drivers and users.
After all, people who used to hail autos on the streets have moved to platforms to book rides as they want to avoid the risk of infections.
Which is why cab aggregators aren’t the only ones invested in this category. In October 2020, bike taxi player Rapido quietly launched quietly launched India Today Rapido Auto completes 10 lakh rides within five months of launch Read more its three-wheeler service, while pandemic-hit ride-hailing giants waited for demand to recover.
Since then, Rapido has onboarded more than 100,000 drivers in 25 cities and completed a million rides, said co-founder Aravind Sanka in an email to The Ken. Rapido aims to add up to half a million drivers in the next six months, and it helps the company that it’s already popular in tier-2 and -3 cities, where autos are common.