Comparative Analysis of Uber and OLA

Meru Cabs introduced organized rental cab service in the Indian market in 2004. It soon became popular amongst consumers in urban or metropolitan areas. However, the real revolution came in 2010 with the introduction of app based cab aggregators. OLA was launched in 2011 and Uber followed in 2013. With technological advancements and door to door service becoming the industry standard, customers chose the comfort of being able to book a cab with one click and gave a push to app based cab aggregators. With many cab aggregators competing for market share, consumers became demanding and it became difficult to acquire new customers and retain old ones. These app based cab aggregators have seen tremendous potential for growth in countries like India, where population density is high and parking space is a precious commodity. With public transport being over-crowded during peak hours, this convenient mode of transport gained popularity rapidly.

As customers have become more demanding and the market place is flooded with cab aggregators, it’s a challenging job for rental cab services to satisfy the customer. Not only price but service quality also plays an important role in customer satisfaction. Using a smartphone, it’s easy for a consumer to access, compare, evaluate and buy a service. Most of the cab aggregators offer various kinds of services ranging from basic to luxury.

OLA Cabs, is an Indian transportation network company and was started in 2010 in Mumbai by ANI Technologies Pvt. Ltd. It is based on online app based cab aggregator concept. It offers a range of services that include peer-to-peer ridesharing, ride service hailing, taxi and food delivery. As of May 2019, it was valued at $6.2 billion with a variety of venture capitalists like Softbank holding large stakes in the company. Currently it has a network of 15,00,000 drivers across 250 cities.

Uber Technologies Inc. is an American multinational ride-hailing company. It offers peer-to-peer ridesharing, ride service hailing and food delivery. It expanded to the Indian market in August 2013 and began operations in Bangalore. According to a report in 2016, OLA showed to capture 70% of the Indian market.

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This research is focused on doing a comparative analysis of the major cab aggregators in India, namely, Uber and OLA on the basis of various brand characteristics.

Methodology

With growing competition, both companies are offering a variety of services to make the consumer’s journey comfortable. The consumer is spoilt with choices and quickly switches over to the one with better offerings. The technique used to carry out the research was a mix of questionnaire and secondary data. It included some multiple choice questions along with a rating scale addressed to the respondents. The two brands were rated on various characteristics common to them. A sample size of 22 was taken which included students, homemakers, businessmen and professionals. Secondary data, on the other, included data collected from published articles, newspaper and the Internet. The respondents were asked to rate both OLA and Uber on a scale of 1 to 5 (with 1 being extremely dissatisfied and 5 being extremely satisfied) on the following characteristics.

• Ease of use: how easy the app and service it to use;
• Consumer safety: how safe do the consumers feel while travelling or availing the services;
• Value for money: how pocket friendly the service is or does the service quality justify its cost;
• Ease of payment: how easy and simple it is to make payments on the apps;
• Customer support: do the cab aggregators provide quality customer service or not;
• Availability: whether the services are readily available or not;
• Overall service provided: how the overall experience of the respondent is while using the services;
• Preferred cab aggregator for daily use: which app the respondents will prefer to use in their daily life.

Results and Discussions

According to the data collected from the respondents, majority of them were male (59.1%) and 86.4% belonged to the age group of 18-25 years. Majority of the respondents have completed their Intermediate or Graduation (40.9%). The data collected also suggests that 63.6% of the respondents were students, while 31.8% were either self-employed or salaried professionals. Most of the respondents were aware about various cab aggregators like Uber, OLA, Meru etc.

1. The data suggests that more people found Uber easier to use than OLA. Majority of the people gave Uber a 4 star rating while OLA got a 3 star or a 4 star rating.
2. The data suggests that the respondents found Uber to be safer than OLA. Uber fared slightly better than OLA in terms of consumer safety.
3. The data suggests that the respondents found Uber to be more pocket friendly than OLA. Uber was given 5 star or 4 star ratings for pocket friendliness. On the other hand, a majority gave OLA a 3 star rating.
4. The data suggests that the respondents found it easier to make payments on Uber than OLA. Uber took the lead in terms of ease of payment and was given a 5 star rating by majority of the respondents. OLA scored a 4 star rating on the contrary.
5. The data suggests that the respondents preferred Uber’s customer service over OlA’s. Uber got more 5 star rating from respondents as compared to OLA. OLA remained consistent at 4 star ratings.
6. The data suggests that the respondents found Uber to be more available than OLA. Uber received slightly better ratings than OLA.
7. The data suggests that most respondents prefer Uber’s service over OLA’s service.
8. The data suggests that majority of the respondents prefer Uber over OLA for their day to day use.

Conclusion

Companies are attracted to India because of the sheer size of its market and increasing purchasing power resulting in an uplifting lifestyle. However, the consumers are smart, demanding and highly price sensitive. They are also not very brand loyal. This makes managing such a market an extremely difficult task. Companies need to be on their toes, constantly looking out for new opportunities to grab and for areas to innovate. They need to keep on designing new packages or offers to acquire or retain customers. However, this comes at the cost of a huge cash burn. Thus making it difficult for both Uber and OLA to operate. They constantly need to find ways and areas to minimize costs while developing customer centric, innovate and socially acceptable offerings or packages. It is clearly visible from the results that Uber has excelled in gaining popularity in the age group of 18-24 years. It has also successfully designed an easy to use user interface which has helped enrich the user experience. It has also provided for a secure and easy payment gateway which the doesn’t hassle the consumers. Uber’s services are readily available and are deemed safe by the consumers. It also provides for a decent customer support and provides an overall good experience. It has managed to provide this package at reasonable, consumer friendly rates. OLA on the other hand, is equally popular amongst the consumers. However, it scores lower than Uber in terms ease of use, consumer safety, customer service and value for money. Drivers are the image of the brand and misbehaving drivers causes OLA to score less on the overall service experience of the consumer. As a result, very few consumers are likely to prefer OLA over Uber for their daily use. However, OLA has greater market share due it being available at more locations than Uber. ‘Customer is king’ and it is the reason why companies are striving to make customer’s experience the best. This promotes healthy competition which in turn benefits the end user.

Bibliography

1. https://en.wikipedia.org/wiki/Uber
2. https://en.wikipedia.org/wiki/Ola_Cabs
3. https://www.forbes.com/sites/krnkashyap/2016/09/21/its-uber-vs-ola-for-the-battle-of-supremacy-in-the-indian-market/#2ed4dfbbd99f
4. https://en.wikipedia.org/wiki/Uber
5. https://en.wikipedia.org/wiki/Ola_Cabs
6. https://www.forbes.com/sites/krnkashyap/2016/09/21/its-uber-vs-ola-for-the-battle-of-supremacy-in-the-indian-market/#2ed4dfbbd99f
7. https://www.forbes.com/sites/krnkashyap/2016/09/21/its-uber-vs-ola-for-the-battle-of-supremacy-in-the-indian-market/#2ed4dfbbd99f