Uber and Ola are the two bonafide veterans in India’s ride-sharing space, with the two companies operating in India for the best part of the last decade. The two companies, via their apps, offer ride-sharing services via two-wheelers and four-wheelers, ranging from economy to luxury rides.
With the rise of the app economy during the last half a decade or so, Uber and Ola have seen incredible growth in their businesses. In 2014, Ola became a unicorn, becoming one of the first 10 of a list that is now three short of a 100. On the other hand, Uber is a multinational giant, with operations in 71 countries.
However, the growth in business has come hand in hand with a rise in the number of issues the users of these two ride-sharing giants have had to face. From cases of violent crimes against customers to issues with app experiences and driver behaviour, disgruntled customers have shared their stories on social media concerning regularity.
Both the companies have also faced a lawsuit for their alleged lack of concern for their users. The case, which saw Uber and Ola being ordered to get a licence to operate in Maharashtra, saw advocate Savina Crasto alleging a lack of a proper grievance redressal system at Uber.
She cited a personal incident from November 2020, when she was allegedly dropped off at a ‘shady dark place’, and she discovered that Uber’s app did not allow for filing a proper complaint.
And so, Inc42 decided to take a look at what is going wrong with the services of these cab aggregators, and what is the opinion of the users.
Inc42, in association with Clootrack, analysed 21,573 Google Play Store and Apple App Store reviews. There have been some comparisons with Uber and Ola regarding safety and other concerns related to the two ride-sharing platforms.
A lack of a grievance redress mechanism is not the only issue that riders have with the two giants of the field. It has been made clear that these cab aggregators have had a bit of an iffy track record, and the recent findings of the study shed some damning light on the same.
Cancelled Rides, Poor Customer Service – Concerns of Uber, Ola Riders
Out of the five major concerns that were identified in the study by Clootrack, the most significant one was ride cancellation; it was the concern with the highest brand equity score as well.
Brand equity stands for a quality that a company generates from its name when compared with an equivalent. Therefore, a higher brand equity score in terms of ride cancellations means that Ola has become more synonymous with cancelled rides as compared to Uber.
The sentiment for ride cancellation was almost unanimously negative; 97% of the reviews had negative sentiments for these companies cancelling the rides on their users. On a scale of 0 to 10, ride cancellation scored a worrisome 7.7 for both the cab aggregators.
Mobile app experience was second on the list of concerns, with a brand equity score of 5.7. Customer care, surge pricing, and booking experience completed the list, with scores of 4, 3.3, and 2.7, respectively.
Surprisingly, surge pricing is fairly low on the list, even though in 2020, the Maharashtra government had to cap the same. The government has capped Ola and Uber at a maximum of 3x the fare charged by local kaali-peeli taxis.
As local taxis run at a fixed fare of INR 14.84 per km, hence Ola and Uber cannot charge their users over INR 44.52 per km even during surge hours.
The issue of pricing is a long-standing one, and with recent developments taken into account, is not the one that will get sorted soon.
In September 2021, the Goods and Services Tax (GST) Council, in its 45th meeting underlined that food aggregator apps such as Zomato and Swiggy, and cab aggregators such as Ola and Uber to pay tax at the final point of delivery beginning January 1, 2022.
As the rules came into effect now, online aggregators such as Swiggy, Zomato, Uber, Ola and the likes will have to pay 5% GST over and above the existing 18%, making the services dearer.
In the current scenario, ride-hailing services have two options — payment of 5% GST on the entire sum of the ride including driver-partner fee, without claiming input tax credit (ITC) or they can claim ITC by paying 12% GST on the total of the bill.
The Issue Of Safety
In another finding from our report, Uber has managed to come out as a safer riding choice as compared to Ola.
Customers scored, on a scale of 1-10, Uber at a stellar 9, while Ola had to settle for an abysmal 3.6, depicting a huge disparity between the two cab aggregators.
Safety has always been an issue since these ride-sharing companies first started out. In 2017, the Supreme Court stated that app-based transport service providers needed to be regulated to ensure the safety of women commuters. The apex court had asked the centre to examine the issue back then.
Further, reports of violent crimes have only increased in the past few years. In a 2019 US Safety Report, Uber revealed that it received 2,936 sexual assault complaints in 2017 and 3,045 in 2018 from riders in the United States. According to Uber’s US Safety report, nine people were murdered and 58 killed in crashes.
Incidentally, both Uber and Ola have taken measures to minimise crimes in their cabs and to better protect their customers. In August 2019, Uber India launched a 24×7 safety helpline.
The 24X7 safety helpline would be paired with the in-app SOS button already available in the safety toolkit. It will allow riders to connect to law enforcement authorities in case of an emergency.
Uber said that the new safety line will provide riders with the option to get in touch with Uber’s safety team in case of an urgent issue during a trip, such as reporting a co-passenger misbehaviour, disputes with a driver or a vehicle break-down.
Ola, on the other hand, had also rolled out an AI-based safety feature, ‘Guardian’ in 16 Indian cities and Perth in Australia.
The new feature, aimed at ensuring the safety of commuters, uses real-time data from rides to automatically detect irregular trip activity, including prolonged stops and unexpected route deviations.
These alerts are flagged off in real-time to Ola’s 24×7 safety response team, who will immediately reach out to customers and drivers to confirm if they’re safe and offer on-the-call assistance until ride completion.
However, it seems that Uber’s efforts have borne more fruit, and the customer sentiment reflects that.
The Cab Aggregator Of Choice
In terms of word of mouth marketing, and recommending the service to friends and family, Uber stood out head and shoulders above its homegrown competitor.
The fact that Uber is being perceived as safer compared to Ola in terms of chauffeur driving experience makes sure that Uber is more likely to be recommended.
The US-based cab aggregator got a score of 8.59 in terms of recommendation likelihood, while the Indian cab aggregator got a score of 2.5 on the same score in the Clootrack-Inc42 study.
This is a culmination of a variety of factors, and while safety plays a big role in influencing the score, all the other factors such as customer service, in-app experience, and pricing also play a role. Even so, the difference between the two scores paints a very clear picture of the whole scenario.
Uber Or Ola?
One of the key takeaways from the study is that both the cab aggregators have a lot that they have left to be desired, and there is a lot that they can improve.
While ride cancellations remain a huge problem and the primary antagonistic force for both these cab aggregators, there are other, lesser highlighted problems that still need paying attention. For instance, Uber got dragged to court over an alleged lack of a customer grievance system.
The recommendations score and the safety scores ring hollow in the face of the perceived safety risk the users of these companies face.
According to a report by ReportLinker, the online taxi services market in India was valued at INR 30.72 Bn in FY 2020 and is expected to expand at a CAGR of nearly 13% during the FY 2021 – FY 2025 period, to reach a value of INR 55.15 Bn by FY 2025.
The companies account for almost 75% of all revenue generated in the country’s online taxi services market, according to the aforementioned report and the market consolidation has seen the two cab aggregators going lax on delivering the best possible service to their customers, focusing on competing with one another instead.
The report reflects on the areas where the two companies can improve – by making their services safer for their customers and improving the overall experience for the riders, the two companies can close the gap between what they claim and what they provide.