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Ola, Uber take fight to Chennai suburbs

Bengaluru-based Ola and its US-based competitor have been aggressively enlisting cabs — from Avadi in North to Mahindra World City in the southern region.

, ET Bureau|
Updated: Jun 08, 2016, 10.45 AM IST
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CHENNAI: App-based aggregators Ola and Uber are pursuing each other into the suburbs, driving into a market held by local incumbents like Fast Track, Friends Track and NTL Call Taxi whose city bastions have significantly eroded over the last two years.

Bengaluru-based Ola and its US-based competitor have been aggressively enlisting cabs -from Avadi in the North to Mahindra World City in the southern region, trailing a large section of the city's people travelling for IT, automotive jobs and colleges.

While Uber has driven in to South-west of the city, populated by factories of carmakers and IT offices and engineering colleges, Ola has expanded regionally much earlier, hitting Kovalam in South-east and touching Red Hills, Manali, and Ennore in the Northern areas over a year back. Uber has been in Coimbatore, its only non-metro in the state, for nine months now while Ola has aggregated cabs in seven non-metros in the state and in Puducherry.

Uber says the slow expansion was deliberate, part of a strategy to ensure demand is met with enough supply before heading into the suburbs.

“We constantly monitor analytics of how many times our application is tried in a certain locality to know if there is enough demand to aggregate cabs. Referred to as `eyeball data,' these numbers forms the basis for our expansion,“ said Bhavik Rathod, General Manager for South and West for Uber. He added that expanding in Chennai was far easier than driving into Whitefield from Central Business District of Bengaluru because of high traffic levels and only few arterial roads connecting the two localities.

The average time of arrival of Uber cabs in Chennai, which was 14 minutes when the company began in the city 25 months back, has come down to four minutes.

It chose the south-west part of the city as the total number of cabs plying into the area ran into a few thousands each day, according to Rathod.

For both the aggregators, having many drivers hailing from the suburbs proved an easy touch for expansion. “By default, we have a lot of our driver partners hailing from the suburbs, which makes it easier to build supply in these points and enable them get more paid-runs,“ said Anand Subramanian, Senior Director-Marketing Communications at Ola.

The reaction of local aggregators born and bred in the call-centre era varies from unfazed to quiet acceptance of market domination by the entrants. NTL Call Taxi, which had expanded into the auto-rickshaw segment to prevent market erosion in cabs, is confident that loyalists comfortable calling up for a taxi will continue to be patrons. But, market expansion going forward could be difficult. “There are still people comfortable with our business model, of standard pricing and a responsive call centre system. However, the truth is that market dynamics have changed,“ said G Saravanan, a director at NTL Call Taxi.
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