Why Ola and Uber over normal Autorickshaw?

The era of digitization has stimulated the use of Ola and Uber in recent times. The main reason is consumer satisfaction. The ease of paying reasonable charges and the door-step service is what makes use of these apps more convenient. Looking towards the theory of consumer satisfaction: “Satisfaction is an overall psychological state that reflects the evaluation of a relationship between the customer or consumer and a company, environment, product or service.” With the rise in middle-class families and their disposable income, they tend to or are willing to spend more on better services across different sectors, including private and public transportation. Ola and Uber are examples for the online cab booking apps. We have seen that in recent years, these apps or tech giants have transformed the traveling experience of people in the cities.

The “Indian taxi and autorickshaw market” is an $8 billion industry which is further divided into the organized and unorganized sector. The majority of the market is still under the unorganized sector. With the implementation of laws and with the help of technology, the organized sector is now taking lead with Ola and Uber being the major players. The organized sector majorly consists of government-run buses, privately owned taxis, and autorickshaws. The problems of inconsistency, expensive private operators, low-quality services are the major factors demanding better services. In return, tech giants like Ola and Uber are providing solutions to many such problems with their services. 

As mentioned earlier, India had witnessed growth in the middle class, as a result, it has shown a trend in the willingness of the middle class in spending on experiential and comfortable services. A consumer will always prefer using Ola or Uber over normal autorickshaw because they are more or less one click away. With the availability of cheap data packs and a significant increase in the usage of smartphones, it has become easier for people to use these services. They can sit in their house and book a cab without taking the extra effort of going too far away to taxi or rikshaw stand. Apart from easily availing these transportation services, the competition between Ola, Uber and other private players keeps the prices moderated which protects the consumers from exploitation. 

Looking at the time before Ola and Uber, a normal consumer had to face the irrational behavior of the auto and taxi drivers. They had to negotiate with the drivers over fare to get a good deal. Apart from the negotiation on price, it was on the mood of the auto or taxi drivers to provide the service rather than meeting the demand of the consumer. This ill-treatment and the exploitative pricing had created problems for the general public. On the other hand, the fare charged by Ola or Uber is reasonable and justified. The pricing is based on demand and supply the. Besides, to encourage customers to use the services, the companies are providing offers, coupons as well as cashback which makes these services cheaper compared to normal autos and taxis. Moreover, the treatment from the cab drivers is professional since they are incentivized based on their rating. This way there is complete power in the hands of customers.

Along with good service, the passengers do not have to compromise with safety. Ola and Uber, have registered biodata of their drivers to ensure security to the customers. The success of Ola and Uber is not only limited to their behavioral aspects, but the usage of these cabs has led to some social benefits as well. The congestion problem in big cities is addressed by this business model. For millennials, it is a cheap and comfortable option to commute. Providing coupons and promotional codes often reduces the price of the journey, which as a result becomes more economical for the young generation to use these services. Using Ola and Uber is cheaper than owning a car for the urban population. They rather prefer investing their money than buying a new car. The problem of parking is also not an issue when you travel by Ola and Uber.

In recent times, several cases are being registered about pricing. Strangers, especially foreigners, are charged way higher than the actual amount.  For example, in cities like Chennai, tourists are often charged six to sevenfold than the normal fare. There is opposition by the regional auto drivers claiming that their bread is stolen by these big giants. But as long as auto drivers are ready to take the rides and charge a fair price for the journey, the problem of taking away the market share hardly seems to be a problem. Many auto drivers also claim that, with proper work ethics and willingness to provide good services to the customers, they can again capture the market taken over by Ola and Uber. 

With the ease of just click on the phone, it has become easy for the customer to avail the online cab services. The services provided by Ola and Uber have helped the consumer is getting a better deal and has increased the ease of traveling. They address the problem of congestion in the big cities thus as a whole, increasing the social welfare of the states. These services are now taking India one step ahead in digitization. Even though Ola and Uber are causing problem to the local auto drivers, the services, prices, and consumer experience always comes first. With time, local auto drivers are also understanding this fact and working towards providing better services.