Dec, 2016     

Review of online cab market in India

The online cab industry grew over 3.5 times in Key Dimension terms of total completed rides in 2016


  • A comprehensive performance review of the online cab aggregator market
  • Assessed through a regularly tracked set of performance indicators
  • Published quarterly

Introduction to Report

Report Structure

  1. Comprehensive assessment of Indian online cab sector performance across seven key dimensions
  2. Each key dimension is rated on whether the sector performed above expectations (Bullish ), broadly as per expectation (Neutral ) or significantly worse than expectations (Bearish ) on that dimension
  3. Each key dimension is further built up from multiple sub-dimensions, which are also rated for the sector using the above criteria
  4. Relevant weightages are allocated to each sub-dimension to build up the key dimension rating, and each key dimension is also given an appropriate weight to arrive at overall sector performance rating

Research Methodology

 

  1. Tracks 50,000+ monthly online transactions
  2. Primary Interviews with 1,000+ drivers in 10+ cities every quarter
  3. Primary Interviews with 3,000+ customers every quarter

Rides & GBV Performance - The online cab industry grew over 3.5 times in Key Dimension terms of total completed rides in 2016

Growth in 2016 was driven by industry offerings like launch of cheaper Key Dimension riding options and promotion of carpooling

Key reasons behind industry growth in 2016

Launch of multiple categories and cheaper modes of transport was a growth driver

  • 2016 saw players launch cheaper car categories which led to an increased adoption and subsequently increased no. of rides
  • Reduction of fares in all categories in 2016 also resulted in driving the growth of the industry

Carpooling gets a major boost in 2016

  • Carpooling received huge growth in the past year with all major players focussing more on ridesharing
  • All the players in the industry took up various initiatives like reduced fares & pass to improve adoption of ridesharing

With the offerings, the consumer NPS increased which further boosted ridership

  • Improved supply of drivers, an improved booking and riding experience has resulted in an improved consumer NPS in 2016
  • Cheaper fares and wider variety of cab options have also improved consumer satisfaction in the online cab industry

However, the Q-o-Q growth slowed down with almost no growth during the Key Dimension last quarter

Regulatory Framework -Various regulations were introduced from time to Key Dimension time to regulate the industry

Customer Adoption - Customers have readily adopted online cab services Key Dimension with increase in repeated use

Customer Satisfaction - Overall customer satisfaction saw an Key Dimension improvement during CY16

Customers were satisfied by Booking and Ride experience online in CY16

Driver Adoption & Satisfaction - Overall driver satisfaction also decreased Key Dimension during CY16

Increased drivers supply & reduced driver income resulted in lower driver Key Dimension satisfaction

Operational Performance - Cab Availability and ETA almost remained Key Dimension same with a reduction in driver-side cancellations

Unit Economics - Industry unit economics improved with reductions in Key Dimension incentives in 2016

CY16-Summary

What went right for the sector
  1. 2016 was a year of significant growth for the online cab sector with increase in no. of rides and overall GBV
  2. Customer satisfaction with online cab increased, especially on parameters like booking experience and ride experience
  3. Unit economics for the sector improved, driven by reductions in the driver incentives
  4. Carpooling got a major boost as all the major players took multiple initiatives to promote ride-sharing in 2016

What went wrong for the sector

  1. Due to supply disruptions during the year with cracking down on fraudulent drivers in Q3, the industry growth suffered
  2. Despite constant reduction in incentives, the industry still ended up spending ~1 USD Bn in 2016 in driver incentives
  3. The reduced earnings & more preference to lease model led to unrest among drivers, who resorted to strikes
  4. Regulatory hassles also put brakes to industry momentum from time to time
  5. The industry failed to raise demand from the tier 2 cities which accounted for less than 15% of pan-India rides