[V.Narayan]

Ola and Uber between them are virtually a Duopoly masquerading as an Oligopoly with the likes of Meru/Mega/Kalli-Pilli hanging in as a rump third leg.

What are the implications of this duopoly for all the stakeholders other than the shareholders of these two companies. Why do I ask this question. In my eyes, as an erstwhile business animal, there are several stakeholders to a large business - shareholders, customers, employees, suppliers and the state. In case of Uber and Ola with their shareholders drawn from the same pot of PE funds the value system (others may disagree) is focused solely on the shareholder as the only stakeholder worth bothering about and to hell with the customer and supplier or in this case employee-suppliers.

We have had a glimpse of the values and behaviour of Uber's exited founder - certainly not cut from the same cloth as a JRD Tata or a GD Birla or a William Packard. We have seen how their service standards have slipped and the way their employees dressed up as supplier-vendors are treated too. Their sheer money power has made short change of competition as well as the traditional black-yellow taxi services. And now the nation in the larger cities at least is at the mercy of these two for the intra-city transport needs and now gradually for the inter-city transport needs. At some point these two could form an unspoken cartel to the detriment of all.

Needless to say they used technology to bring a whole new degree of ease and convenience in accessing a cab as well as in paying the fare. But that alone does not merit giving them a duopoly.

What they are aiming for is not merely the road taxi market but to dominate passenger road transport from pick-up point to drop point in its entirety.

[GTO]

Thread moved from the Assembly Line to the Street Experiences Section. Thanks for sharing!

I say, better duopoly than monopoly like we have in so many other tech sectors like search (Google), messaging (WhatsApp), social media (Facebook & Insta, both owned by the same company) and many more.

In fact, my worry is that in the longer term, Uber might scale back from India and hand over its operations to Ola. Remember, both count the giant Softbank as their common investor and this kind of merging has happened in other markets. Am a bit optimistic though of them staying independent as for Uber, India is the 2nd most important market after the USA.

As long as the duopoly remains, things will be good because the two are fiercely competitive. Another example of a good duopoly IMHO = Android & iOS.

[2000rpm]

I really wish a third player comes into picture. There is something called CEO Cabs in Mumbai, which has a few cars (mostly ex Uber and Ola).

[Thermodynamics]

Duo poly is still better, but all tech sectors usually boil down to monopoly. We may be today talking about Ola and Uber, there could be a revolutionary product tomorrow that would take sector by storm.

Originally Posted by GTO

As long as the duopoly remains, things will be good because the two are fiercely competitive. Another example of a good duopoly IMHO = Android & iOS.

^^^
Agree, although iOS plays a niche segment and is a monopoly in itself.

An interesting stat

https://youtu.be/HzkHlPa1wo8

[Guna]

Duopoly is better than a monopoly but ideally there should be multiple players offering different value proposition, catering to varying needs and operating on slightly different models.
In general, I hate business models which pump VC money to eventually kill the brick and mortar businesses. Internet/app based companies should not have so much undue advantages. In that respect I like the proposed model of Jio eCommerce which aims to work with the local retailers instead of taking away their business like Amazon/Flipkarts do with the help of VC money ( and VCs are only interested in inflating the valuation and looking to exit)

[GTO]

Originally Posted by 2000rpm

I really wish a third player comes into picture.

Don't think that's likely due to the sheer amount of money involved & burnt. Here's an excellent article by one of my favourite writers - Ashish Mishra - Behind TaxiForSure’s sellout:

Over the previous 18 hours, Raghu, as he is popularly known, had practiced the speech, playing the sentences over and over again in his head. He would start by saying that in the three-and-a-half year journey of TaxiForSure (TFS), he had never thought that a day like this would ever come. That he had never planned for this. That it was the worst moment of his entire TFS journey.

Now that the moment had arrived, at around 2.30pm on a warm March afternoon, at TFS’s office in Bengaluru’s Koramangala, on the terrace, in front of almost 200 nervous employees, Raghu was overcome by emotion.

He gave himself a few seconds to recover. And then a few more.

The previous 18 hours had been tough. He had barely slept, knowing what was around the corner. Monday had started way earlier than usual. He woke up at 5am but there wasn’t much to do, so he idled around and, then, when his two-and-a-half-year-old son woke up, he made him breakfast. At about 7.30am, Raghu and his wife, Shilpa, left home. Their destination was TFS’s first office—the company had started here in 2011 with just two people—Raghu, 33, and Aprameya Radhakrishna, 34. It was a 100 sq. ft terrace office; No. 855, 4th Floor, 7th Main, JP Nagar, Bengaluru-78.

[2000rpm]

Originally Posted by GTO

Don't think that's likely due to the sheer amount of money involved & burnt. Here's an excellent article by one of my favourite writers - Ashish Mishra - Behind TaxiForSure’s sellout:

Very well written!

I am fascinated by the start-up world. The struggles, the highs and lows. Would love to see all this action from close proximity!

[samaspire]

Isn't it possible for all the smaller players including the Kaali Peelis to come under one app? Not exactly come under, but any taxi driver can register and offer his services through that app.

[vibbs]

Originally Posted by samaspire

Isn't it possible for all the smaller players including the Kaali Peelis to come under one app? Not exactly come under, but any taxi driver can register and offer his services through that app.

Well you can book a Kaali Peeli via Ola in Mumbai.

[Miyata]

Similar is the case in credit card space with duopoly of visa and mastercard; in aircraft manufacturing by Boeing and Airbus.

While there will come an equilibrium in terms of service providing, price fixing, and driver compensation structure, it's unlikely to be particularly harmful to customers, drivers or any nation. It's probably also unlikely there will be a Jio-like effect in the road-transport space.

I think the big thing growing out of this duopoly could be the ride-pooling options such as quickrides, blabla cars, etc where smaller communities (such as apartment complexes, schools, offices, etc) might get their custom platforms to co-exist along with Ola/Ubers.

Such constraints (like duopoly) sometimes enable creative growth/emergence of alternate options we might not have thought of otherwise. Look forward to see how it all plays out.

[AZT]

Uber took over an Egyptian rival Careem and it's interesting to read the commitments they have agreed on to reduce harm to competitors.

Under a series of commitments Uber has made to the ECA, the San Francisco-headquartered company has agreed to abandon exclusivity provisions with partners and intermediaries and reduce barriers to entry into the market.

Excluding surge pricing and promotions, Uber will cap its yearly fare increases beyond inflationary costs at 10% for Uber X and Careem GO, the most popular services in Egypt.
Surge pricing, a mechanism that raises prices when demand far exceeds supply, will also be capped on Uber X and Careem GO at 2.5 times. Surge prices will be applied to a maximum of 30% of annual trips on the two services.

I think India also needs some regulations on these lines to allow for fair competition.


Source: Link

[libranof1987]

Originally Posted by V.Narayan

Ola and Uber between them are virtually a Duopoly masquerading as an Oligopoly with the likes of Meru/Mega/Kalli-Pilli hanging in as a rump third leg.

It isn't as much as their duopoly but the nature of their business (just being an aggregator, not a service provider) that is a concern with Uber/Ola. Double that with Govt. behavior (either, apathy or in extreme cases, banning them), and we are at the mercy of some PE-inspired marketing genius for the experience of the service or the Call Centre Exec's mood to get issues resolved. That said, we've been just exactly haplessly at the mercy of auto-wallahs and taxi-wallahs, considering how dramatically that industry has been politicized. Their way, else walk.

I know from first-hand knowledge that one of the third leg players that you've mentioned in your post refused to go down the discounting/cashback/ incentive-driven business model and chose to shut down than burn insane amount of cash to earn revenue.

What we need are comprehensive laws: on definition of minimum service, labor laws, consumer protection and so on.

[2000rpm]

I also believe that public transportation has to be the third player here. With Mumbai metro, we mumbaikars have high hopes. Travelling from Mumbai to Thane takes more than 2 hours one side today, if that is reduced to 45 mins, who will opt for the Uber? (P.S. All mumbaikars are used to the crowd as they have been travelling these routes long before Uber and Ola entered the Indian market)

[rajwheelz]

Uber/OLA are bleeding cash and it's only a question of time when it becomes an expensive proposition to hire a cab. And eventually the middle class will fall back to public transport.
At-least in Bangalore, I am now easily able to hire an OLA auto as opposed to a cab which these days takes an eternity to get. It's surely a ego satisfying ride having hailed an auto from an app and the auto wallah actually arriving to where I am waiting and driving me to my destination without any price haggling and refusals.
Having said that, with the EV revolution and the metro connectivity, I predict the future cabs/autos will be EVs catering to shorter Point A <-> Point B shuttles and that's when Oligopoly would kick in and Uber/OLA would surely fade

[shipnil]

I do not think this is duopoly in truest sense. Every major city has black yellow autos / taxis. So there is competition, albeit an unorganized one.

I feel this kind of duopoly is much better than the pre-ola/uber days. I always used to be tense before hiring an auto those days, wondering what fare I would be quoted or what reason I'd have to hear for refusal to ply. App based taxis have done away with that feeling. In fact, before these, there were couple of call auto services launched in Pune and I was quite happy to hire those than talk to the autowalla next to my society gate.