Uber relaunches Uber Auto in India; will it diversify further?

In a recent visit, Uber CEO, Dara Khosrowshahi, said that India is an important market for the company and will act as a laboratory of sorts. Does this indicate more diversification from Uber to tackle competition? 

Global cab aggregator Uber recently relaunched auto services in India almost two years after it shut down the services. The service will be currently available in Bangalore and Pune. While Uber says that the initial launch was paused to see how the ecosystem evolved, it may have relaunched the auto services to win over the ongoing battle with homegrown company Ola. 

Uber auto rides start at a base fare of Rs 25 for four kms. After which they charge Rs 13 per km between 6 am to 11 pm and Rs 19.5 per km during night charges, the company announced on its blog. 

“While Uber says that the initial launch was paused to see how the ecosystem evolved, it may have relaunched the auto services to win over the ongoing battle with homegrown company Ola.”

Does this indicate further diversification in offerings? 

Recently, Uber CEO Dara Khosrowshahi was in India, when he cleared the air about Uber exiting unprofitable markets such as India. He also said that the focus of the company now would be working with authorities to make Uber a car-sharing company rather than just a taxi-hailing company. In fact, one of the ideas was looking at part-time owner-driven cars on the platform in India additionally to the licensed taxi. 

Khosrowshahi said that Uber has to become more local, understand the Indian consumer, and build products so that it is more tuned to the Indian consumer, five years from now. 

Looking at its biggest competition in India, Ola has a lot more diverse offering in comparison to Uber. For example, Ola has rentals and outstation options which Uber currently does not have. Other areas that Uber could look at diversifying would be self-drive cars to enter yet another segment to compete with Ola.   

Global scenario: Lost battles in China and South-East Asia 

Uber exited China in 2016 and then Russia in 2017.  Uber lost out to Chinese rival Didi Chuxing and Russian rival Yandex. Globally, there were reports of Uber exiting South-East Asia after local rival Grab and Go-Jek overtook the market. However, Uber CEO has said it would be investing more aggressively in the region. The news of exiting markets came after reports suggested that Uber investors had recommended exiting areas that were not profitable.