Uber Taxi Service: Toyota, Honda cars replace Mercedes, BMW

Uber, the taxi hailing app which kicked off its services in India by offering luxury cars such as Mercedes-Benz and BMW to its clients, seems to be replacing them with more economical cars like the Toyota Innova, Corolla and Honda City.

In cities such as Bangalore, Uber has altered the payment method for its luxury vehicles from a lump sum at the end of the month to a commission basis. The monthly payment for luxury cars was in the region of Rs. 85,000 - Rs. 2,00,000 per car, whereas, on commission basis, the rate offered was lower. This has prompted luxury cab operators to stop services.

In Mumbai and Delhi too, Uber has reduced the number of luxury cars in its fleet and added more Innovas. This downgrading is likely to result in Uber losing its premium brand positioning among taxi operators, which in turn could result in the loss of upwardly mobile customers.

Uber is believed to be spending about Rs. 1-5 crore on launch in a new city in India and the offer of a premium vehicle like a BMW is just to create a brand in the minds of the more affluent customers.

Source: ET Auto