Earlier, an auto driver could bill ≥ ₹1,000 per day via Uber (8-hour shift); Uber’s commission would be 25% of that i.e. ~250.
Now, Uber is charging a flat daily fee of ~₹20 to ₹40 to the auto driver i.e. the auto driver is paying Uber approx. 1/10th what they did earlier.
Naturally, this is a response to competitive pressure e.g. Rapido introduced this change in Feb ‘24, Ola made the change in April ‘24 etc
Big win for the auto driver 👍
Doesn’t make a(ny) difference to Uber - here’s why:
(1) India is a (really) small % of Uber Global 😅
- Uber India FY23 was ₹2,666 crore revenue (Btw, ₹1,977 crore comes from outsourced operations for Uber Global)
- Uber India’s combined revenue of ~$310M in FY23 is ≤ 1% of Uber Global’s revenue $37.3bn in CY23
- Uber globally generated $1.9bn in profits in CY23 — the $36.5M loss in the Indian entity is a drop in the ocean.
(2) Uber’s India strategy is somewhat skewed towards the premium segment 🔝 **
- Since June ‘23, Uber has begun to move into the premium segment (EVs, SUVs etc)
- It has invested over $50M into Everest Fleets (provider of the Uber Green fleet)
- In Sept ‘24, Uber re-launched Uber Black (premium cars & SUVs). Both Uber Green & Black are fleet provided (i.e. Uber partners with a fleet operator) versus the orignal Uber ‘DCO’ (driver cum owner) model
(3) Uber India is sticking to global strategy of being a multi-modal mobility platform 🚖 🛴🛺
- Globally, Uber has made the transition from cab app to mobility app (under CEO Dara)
e.g. Uber x Lime to provide scooters within the app | Uber x Thames Clipper to provide boat rides in London | Uber Shuttle in India
Hence, retaining a competitive offering in 3W mobility in India is key.
** Interestingly, EVs are now at 1.8% of total distance covered by Ubers in India (per the 2024 report). But, Uber’s premiumization strategy has a barbell counterbalance in the mass transport segment with Uber Moto (per them, 68% of Moto users are net new to Uber)
At a macro-level, with the entry of EVs into the 4W space, DCOs are being replaced with Fleet operators (e.g. BluSmart) whereas the 2W & 3W space is still dominated by DCOs who can be attracted via the SaaS pricing model.
➡️ Rapido has already launched the SaaS pricing model for 4W - will Uber follow suit? I think not… esp. with Uber moving towards the premium segment of 4W.'
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