The streets of Bangalore are witnessing a fare war of sorts. Close on the heels of an auto fare hike, cab aggregators are offering fares equivalent to autos or even less.
While the recent hike saw auto fares going up to Rs. 13 per km, Meru Genie is offering its cabs at Rs.12.50 per km while Ola Mini has come up with a fare plan of Rs.13 per km.
Offering services with hatchbacks run on diesel and with enhanced maintenance, aggregators are in competition with LPG backed autos that are considered to be low on maintenance. Also in the race are travel agencies that have been traditionally offering cab services to its clientele.
Meru has indicated that Rs. 12.50 per km could be an introductory price, but Ola did not comment on whether it was introductory or a permanent fare structure. While both declined that they were in any sort of fare war, a huge market coupled with a lack of professionalism in the cab segment seems to have triggered their interest. The Meru Genie, said company sources, was launched after extensive third-party research. Likewise, company sources said that Ola Mini arrived at the cost to make its mode of transport “the most convenient, reliable, economic and easily accessible.”
Both are banking on higher volume and the use of technology to usher in efficiency and viability to a model that is vulnerable to dry (empty) and wet (stationary) runs which result in reduced returns on investments for their car owners.
A drawback, however, appears to be that hatchbacks are limited and higher-rate sedans will have to be offered to commuters when the former are not available.
Meanwhile, Meru plans to ramp up its fleet size from 250 to 2,500 cabs in 18 months while Ola plans to increase its current size from 250 to 1,000 cabs in one year.
Undeterred by the fare war, Radhakrishna Holla, president, Bangalore Tourist Taxi Operators Association, said: “Price reduction is only a brand building exercise will not affect us. Our business is dependent on our regular customers.” According to him, Bangalore has about 8,000 vehicles as taxis including about 4,500 vehicles currently plying as city taxis while the others include those deployed for employee transportation.
Auto drivers too appear equally unperturbed. “The fare is not going to affect us,” General Secretary of Autorickshaw Driver’s Union Rudramurthy said.
