Reality catches up with Uber – Mumbai taxi fares re-revisited

Uber Mumbai has just announced a big hike on the Black and SUV services, pretty much bringing them on par with the Ola Prime SUV service. So here’s the latest fare chart (older versions here – v1, v2):

Approx. taxi fares in Mumbai as on 13 July 2015
Approx. taxi fares in Mumbai as on 13 July 2015

Note on the calculation methodology:

  • Travel time calculated assuming 3 min per km (Uber, Ola, TFS)
  • Waiting time taken as 1/2 min per km (kaali peeli & Meru\TabCab)

How Uber’s shaken up the pricing structure in India

I’ve been using Uber quite frequently over the last couple of months and today’s Mumbai taxi strike to protest such services ironically forced me to opt for Uber at a 1.8x surge price. While I’ve had my share of ups & downs with Uber, the flexible pricing model has been one aspect that I’ve been impressed with compared to the competition like Ola.

Uber managed to create quite a buzz offering single digit per km rates which was almost half the rate others were offering at that time, but the pricing model which included a per minute charge on the trip ensured that the overall fare was not unsustainably low. This has also allowed them to go after the local taxi & auto services in the different cities and they also end up being cheaper for medium to long distances.

The Uber pricing in India is typically a low per km rate coupled with another per trip minute rate on top of a fixed base fare, with the overall fare subject to a minimum amount and of course the surge factor. Putting it simply:

Fare = Surge factor x (Distance x Rate per km + Trip time in minutes x Rate per minute)

Ola which had started off in India with a conventional pricing model of rate per km and a waiting time rate has pretty much overhauled their pricing to mimic the Uber model. They have in fact abandoned their initial method of applying a fixed peak time price during 2 slots on weekdays in favour of a surge factor. The other taxi services like Meru, Tab Cab, Easy Cab etc. have thus far stuck to the traditional model, though they’re trying to stay relevant through special offers.

I also did a simplistic analysis of how the different services compare in terms of the trip fare in a city like Mumbai (Google Sheet here). I’ve assumed a trip time of 3 minutes per km and waiting time of 1 minute for every 4 km, so the results are going to be quite different in heavy traffic.

Approx fare comparison
Approx fare comparison (corrected)

For short distances, the local kaali peelis are of course the cheapest, but for distances above 10 km, UberGO ends up being a better deal. The next cheapest is the Ola mini which starts getting pretty competitive with kaali peelis after the 20 km mark. This is of course disregarding the non-AC nature of the kaali peelis. [Update] Ola Mini and UberX are pretty competitive till the 10 km range, but separate pretty quickly after that as the near 30% higher charge per km for Ola starts making a mark.

The older generation of Meru, Tab Cab etc manage to remain competitive with the newer lot, matching the next best Ola Sedan UberX and Ola up to the 10 km mark, but the higher cost per km quickly multiplies beyond that point. And then we have UberBLACK and UberSUV which have the same rates but different capacities. They can actually offer a better deal than Meru and the likes for long distances over 25 km. Of course if you have 5-6 people travelling, then these 6 seaters are the way to go. Lastly, we have Ola’s version of the SUV with its Prime service that’s the costliest of the lot. Again, if you are in a group of 5-6 people, this can actually be cheaper than the taking two 4-seater vehicles, unless of course you manage to get a couple of UberGOs.

I haven’t considered the surge pricing in the above comparison, and that is a scenario where the older lot turns out to be cheaper. However, such scenarios are rare as Merus and the likes can be pretty hard to find for immediate travel. The interesting thing to see now will be the role that regulators play in toying around with these pricing models.

Update (16 Jun 2015): Found a major miscalculation in the trip time. I have corrected the graph and updated the text accordingly.

The troubles with the kali peeli experiment of #OlaCabs

I have been using the kali peeli service of Ola Cabs since it was launched last year, and the experience had been quite good leading up to January this year. However, the last few weeks have been pretty bad:

  • There have been instances where the booking gets accepted by a driver, only to be cancelled in a few seconds\minutes. This can be especially problematic if you’ve exited the application as there is no notification.
  • Many a times the drivers accept and even call up confirming they’ll arrive in a few minutes. However, on checking the app after those few minutes have elapsed show the trip completion page with the rating option. I promptly leave a 1 star rating of course.
  • I even found a guy with 2 mobiles, and he pretty much logged out of one and logged in through the other as I got into the cab.

I’ve been through up to 6 attempts at trying to book a kali peeli before giving up on some days. All this makes me wonder whether the kali peeli experiment is drawing to a close. Based on my conversations with the some of the drivers over the last few months (some of who wondered why Ola was paying them), the kali peeli option seems to have been a marketing and potentially recruitment exercise by Ola. It was good while it lasted I guess.

An observation on the non kali peeli side of things

I’ve also used the regular Ola service (mostly mini) over this period too, and discovered a loophole in the prepaid wallet which possibly applies to other services like Uber and Meru as well. The way I discovered it was also pretty interesting.

I had availed the 100% cashback wallet topup offer and booked an Ola mini for a return trip from an event in Vashi. I had spoken to the driver a couple of times to provide him with directions as usual, and he confirmed that he had reached. I got in the elevator with my family, and stopped at one of the floors on the way down where an elderly gentle man tried to get in with his suitcase, but the lift doors wouldn’t close. So he got off and set down the stairs. The doors didn’t close even then, and we ended up taking the stairs as well. As we made our way to the gate where the cab was waiting, I called him and as we exited the gate, we found the cab pushing off in the opposite direction though I had told him to come towards the gate.

I called the driver again and he told me that someone had already boarded the cab and told him that he was one of our friends who had to go to the airport and he’d also booked a cab for the airport. After a lot of heated arguments between the driver, the so called “friend” and me, it finally emerged that it was the same elderly gentleman who’d caused us to climb down the stairs, taken off with our cab and refused to get off. Luckily the driver managed to get him off before they went to a long way and returned to take us.

Since Ola is metered completely on the mobile with no intermediate readings, it was impossible to reset the meter (at least the driver and I didn’t know how), and the entire amount ended up getting deducted from my wallet. The saving grace was that it was possibly only a km or so extra, and I offset some of it from the toll payment made by the driver in cash.

Now, think of a situation where Ola recruits the unscrupulous kali peeli drivers who’ve been exploiting the system as I noted earlier, and they take joy rides with your Ola money. Not very pretty, is it? I’m sure they’ve built in some measures to guard against this kind of behaviour.