Market Trends of India Taxi Industry
Adoption of Electric Vehicles will Possess a Positive Outlook for the Taxi Market
- One of the primary factors fuelling the market's growth is the increased adoption of electric vehicles in the country, mostly because of the stringent governmental regulations against pollution and environmental aspects. The Indian government has set a target of achieving 30% Electric vehicle sales by 2030. The electrification of ride-hailing vehicles, particularly a switch to battery electric vehicles (BEVs), would reduce CO2 emissions and improve air quality in cities.
- In addition, the adoption of BEVs could reduce maintenance and fuel costs for drivers and encourage a faster roll-out and higher utilization of charging infrastructure. Players in the Indian Taxi market are introducing various business strategies and expanding their market reach. They are partnering with car manufacturers to help Ride-Sharing companies negotiate reduced purchase or leasing prices for electric vehicles to be passed on to the drivers. At the same time, car manufacturers can benefit from further electric vehicle sales to meet their CO2 or zero emission standards. For Instance,
- In February 2023, Uber Technologies, India's leading Ride-sharing company, signed a Memorandum of understanding (MoU) with Tata Motors, India's leading automobile manufacturer and the pioneer of India's EV evolution, to bring 25,000 XPRES-T EVs into their premium category service. Aligned towards its goal of a clean and green environment, Tata Motors will be aiding Uber in electrifying its services across Indian cities Delhi NCR, Mumbai, Kolkata, Chennai, Hyderabad, Bengaluru, and Ahmedabad. The Company will begin the deliveries of the cars to Uber fleet partners in a phased manner.
- In March 2023, Ola Electric, India's leading mobility platform and one of the world's largest ride-hailing companies, was invented in StoreDot, an Israel battery tech company known for extremely fast charging (XFC) technology. This investment marks Ola Electric's initial step in global strategies investments, focusing on advanced battery technology for Ola Cabs and Two wheelers, including StoreDot's 5-minute 0-100% Extreme fast charging battery, with exclusive manufacturing rights for India.
- In September 2021, BluSmart Mobility, an Electric Ride-Hailing Mobility Service, signed a Memorandum of understanding (MoU) with Tata Motors, one of India's leading automobile manufacturers, to expand BluSmart's all-electric fleet multi-fold across Delhi NCR, and for the same, the Company has bagged a contract to supply 3,500 XPRES T EVs. This contract marks a key milestone in the electric fleet market. As more customers now prefer to travel in environment-friendly vehicles.
- As these factors continue to develop, it is likely to drive the growth trajectory over the coming years and will have a subsequent positive impact on the India Taxi market.
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Online Bookings Driving the Market
- One of the primary factors fuelling the market's growth is the increased usage of online cab booking platforms; there are several factors, including the convenience they offer to passengers and the ease of online payment options. The flexibility of choosing pick-up and drop-off locations and the availability of information on the application, such as driver contact details and vehicle details, have also contributed to the increasing popularity of online type booking.
- The rise of smartphones and the internet has made it easier for customers to book rides online, and this trend is expected to continue in the future. In addition, major operators like Uber Technologies, Ola Cabs, and Meru Cabs offer ride-sharing options in certain cities, which have become increasingly popular due to their low-fare options. Players are also incorporating ride-sharing options into their application development to meet the growing demand for these services. Several key Taxi players are actively investing in the Indian region in order to expand their presence and cater to a wide range of customer base. For instance,
- In May 2023, inDrive, a California-based online ride-hailing platform, announced the launch of its services in Indian Metro cities Pune and Bengaluru. It has already launched its services in 2019. The platform follows a fair-price setting model under which passengers and drivers negotiate fares among themselves. It offers ride-hailing, intercity, freight, and delivery services in India.
- Further, the Indian government has encouraged the adoption of convenient technology in the taxi industry through various initiatives, for instance,
- In July 2023, Karnataka, India Transport Minister Ramalinga Reddy announced the development of an autorickshaw- and taxi-booking app akin to private cab aggregators like Ola and Uber. The app connects customers directly with auto and taxi drivers, targeting the market for affordable fares by eliminating intermediaries. It has gained popularity among commuters in the city. The fares are set based on the government's fixed price list, with a booking charge of INR 10. Drivers have the option to increase the booking charge up to INR 30.
- In August 2022, Kerala, India Chief Minister Pinarayi Vijayan launched Kerala Savari, a government-owned online taxi service in Thiruvananthapuram. The Kerala Savari has a fleet of around 500 autos and taxis enrolled, which will be charged 8% as a service charge against the 20-30% levied by private operators.
- These factors are likely to contribute to a positive outlook for India's taxi industry over the coming decade and which is likely to fuel the demand for the taxi market during the forecast period.
