Uber has been discreetly experimenting with a variable pricing service in over a dozen locations in India, a step that might aid its growth in the South Asian country and create competition for other ride-hailing platforms like Ola and inDrive.
The adaptable pricing service, known as Uber Flex, was launched in India in October of the previous year and has since grown to over 12 cities, including Aurangabad, Ajmer, Bareilly, Chandigarh, Coimbatore, Dehradun, Gwalior, Indore, Jodhpur, and Surat, among others, according to exclusive information obtained by TechCrunch. Uber has verified that the variable pricing service has grown.
An Uber spokeswoman stated in an email statement to TechCrunch that they are actively testing this service in several markets in India that are classified as Tier 2 and 3.
The service, which was first introduced for taxis and then extended to auto-rickshaw trips, allows passengers to propose a specific rate for their journey. This is distinct from Uber’s typical dynamic pricing strategy, which fluctuates based on the availability of drivers, customer demand, and traffic conditions in a specific area.
Uber Flex provides nine different pricing options, allowing users to select a fare of their preference that will be distributed among surrounding drivers. A default price is pre-selected for convenience. Based on that price, the drivers have the option to accept or decline the ride.
Uber’s rival inDrive, which operates in several locations in India, enables passengers to negotiate the tariff by manually entering a specific amount for their trip. Nevertheless, some inDrive drivers in the nation have expressed dissatisfaction with consumers proposing excessively low fares for their trips. inDrive has not yet resolved the issue of drivers being worried about customers aggressively negotiating their fare. Instead, they have emphasised that their “distinctive approach guarantees that drivers are adequately paid while passengers have access to an affordable yet excellent ride-hailing service.”
“By giving drivers the choice to propose alternative prices to passengers, inDrive provides drivers with the option to raise the price if they wish,” explained inDrive APAC director Roman Ermoshin in response to a question about how inDrive is addressing driver concerns about fair compensation.
Drivers frequently express dissatisfaction with the pricing on ride-hailing platforms, since they like to be fairly compensated for their services. With an emphasis on equity and openness, inDrive displays a suggested price in the app, which is typically slightly lower than in other apps. This is achievable because inDrive charges drivers significantly lower fees (approximately half as much as the competition), allowing drivers to earn the same or more even with higher prices in other apps.
Uber is attempting to address the issue of low fares experienced by certain inDrive drivers by prohibiting users from manually setting a specific rate in the flex-pricing mode. It also sets a limit on the minimum fare.
The service is offered for reasonably priced Uber Go rides and Intercity cabs in certain cities, while in others, it is also accessible for Premier cabs and auto-rickshaw rides. Commuters have the option to pay their fare using either cash or digital payment. In addition, although Uber offers a flexible pricing plan for different modes, it is not implementing it for all modes within a single city.
Uber is currently experimenting with Flex in additional markets like as Lebanon, Kenya, and Latin America. TechCrunch discovered that the corporation was also planning to evaluate the new service model in major cities in India, such as Delhi and Mumbai, in the near future.
Besides Uber Flex, the firm based in San Francisco is experimenting with several services in India to meet the needs of the local market. These options include Uber Taxis in Mumbai, which provide traditional taxi drivers as an alternative in the city, and a Wait & Save model in places such as Mumbai, Guwahati, and Chandigarh. This model allows passengers to avoid surge pricing and book a cab in advance at a lower cost.
The app-based cab business in India has grown in recent times, with new participants joining the urban transportation sector in the past few months. Companies like BluSmart and Evera provide electric taxis, while Ola, Uber, and inDrive have enlisted a significant number of petrol cabs. In the previous year, Rapido, a company that provides bike taxi services, also began selling its cab service in the country in order to increase its earnings and attract new consumers.
However, Indian taxi drivers – regardless of the platform they operate on – face difficulties because of comparatively poor pay and a lack of safety. Many people are unsure about whether they will continue to be employed once their current vehicles become outdated.