India Adds a New Crowdsourcing Perspective on Google Uber Investment

August 30, 2013

in Crowdsourcing

Meru CabsUber with an investment from Google (see earlier post)  is expanding into India and it recently launched in Shanghai. It’s worth thinking beyond the quotes and PR releases. What might Google/Uber (Goober?!) learn?

Uber has landed in India after the company recently strengthened its Asian base by debuting in Dubai (UAE) and Shanghai (China). A California-based start-up that connects Taxi-seekers with drivers of luxury cars for hire through their smartphone app. As per the blog celebrity artists Raghu Dixit and Vasundhara Das were amongst the first to experience Uber in Bangalore. ”Over the next several weeks, Uber will be in “secret testing mode” in Bangalore; availability will be limited as we work to make more cars available and test our pricing“, read the blog. via WATBlog 

To organize the rest of the market at a fast pace, the radio taxi market is moving towards the asset-light model, in which sites such as lend their brand to drivers and cab operators in exchange for a fee. Meru, too, has become part cab operator, part marketer. However, as these sites scale up using millions provided by their PE backers, it is becoming increasingly challenging for them to consistently deliver high quality service. “While lots of companies have entered the sector, few have been able to scale up. Getting the right people and driving good service levels without owning inventory are big challenges,” said Aprameya Radhakrishna, co-founder of cab booking site  via Livemint.

What makes some of these new markets interesting is the number of cars available with drivers. A driver in India is almost mandatory for any executive car and most upper middle class families will have a car and driver. Both driver and car are often underutilized and or traveling the streets looking for a park. I suspect the right package from Uber could entice a number of these owner/driver cars into part-time service. The trick is to tie the car, driver and owner correctly into a package. The driver cost relative to the cost of running a car is minuscule and is effectively a sunk salary cost for the owner. This makes these markets very attractive for assessing whether or not individual “owners” will be willing to turn their cars into a crowdsourced service. That may also have ramifications in 2020 when robocars are expected to hit the roads.



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