Ride-sharing recovery for Uber, Rapido, others hinge on bikes, autos; cab-booking sees least comeback

While app-based cab booking services may take longer to accelerate back to pre-Covid ride volume, the more affordable segments of the ride-sharing sector – bike taxis and autos are likely to vroom their way back to January volume relatively faster. The segments, which are led by the bike and auto booking services of Uber and Ola along with Rapido, despite having a rough ride in the past few years due to regulatory potholes were able to maneuver well until Covid struck. However, post-Covid, particularly during the unlock phases, on-demand bike taxis and autos have been able to pull off the near-decent recovery in comparison to cab-hailing services, according to industry experts Financial Express Online spoke with.

This is largely because of three reasons: first, chances of contraction and hygiene risk are more in cabs than bikes and autos; second, mid-to-long distance travel in a city such as home-office commute being muted amid Covid stifled online cab booking; and third, affordability really kicked even for shorter distances as people preferred bikes or autos over cabs amid tough job scenario and salary cuts.

“Unlike cars, bikes are open and from the Covid perspective, indoor is more risky than outdoor. Also, bikes are meant for a shorter duration. So, the chances of contraction are lesser than in cabs. The only problem is that you are too close to the driver. In terms of cabs, lot of customers may have gone back to hometown and may not return until offices resume. This would impact the recovery of four-wheeler booking. Also, you cannot guarantee cab hygiene. Indian drivers are very poor in maintaining that,” said Yugal Joshi, Vice President at Texas-based consultancy Everest Group told Financial Express Online.

The ride-sharing sector, including online cab, auto, and bike booking, as of January this year did 115 million monthly rides. However, Covid-induced lockdown brought it down to 35 million as of September, according to data from RedSeer. “Out of 115 million monthly rides in January, around 70 million came from cabs, around 20 million were contributed by bikes and rest came from autos. Recovery of cabs has been slowest at around 21 per cent in September from January level in monthly rides. As of September, out of the 35 million, only around 15 million rides belonged to cabs,” Saurav Chachan, Senior Consultant, RedSeer told Financial Express Online.

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Further, out of the remaining 20 million rides, bike taxis recovered up to 40 per cent with a share of around 8 million rides while autos recovered back to 48 per cent with a share of around 12 million via online platforms like Uber, Ola, Rapido, etc. “Ola and Uber cabs would take even more time to hit pre-Covid level. The recovery would be slower than one would expect. Also, one might also consider the chances of another wave of Covid that would have the matter even worse for these companies in terms of top line and bottom line,” an industry expert told Financial Express Online. Apparently, bike and auto rides would be able to help digital transport companies sustain the existing crisis that is far from over. The overall digital mobility sector comprising autos, cabs, and bikes recovered to only 30 per cent of January-level with the beginning of the unlock phases.

Ola didn’t immediately respond to a request for comments.

However, both Uber and Rapido claimed ‘good’ recovery of mobility business as cities begin to reopen. “There are some cities like Delhi and Guwahati, where our recovery rate is already back to pre-Covid levels. Overall, we have recovered around 55 per cent of the pre-Covid business levels and expect to recover completely by the end of the year 2020,” Aravind Sanka, Co-founder, Rapido told Financial Express Online.

As Uber had resumed operations in all of its 83 cities across India, its business was “stronger in September than it was in June. Demand varies across categories and markets, with our low-cost products like Auto and Moto leading the way,” an Uber Spokesperson told Financial Express Online.

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Apart from market dynamics, platforms’ own strategies to tap into the business-to-business (B2B) play has helped them arrest a steep fall in business. For instance, Uber explored the delivery of groceries, medicines, packages, etc. through tie-ups with various platforms. Rapido too had launched on-demand delivery services such as Rapido Local and Rapido Stores for customers and businesses during the lockdown, to leverage on its existing supply of drivers, that has grown over 3X post lockdown.

“Pre-Covid, our business revenue distribution was 8 per cent from our logistics business (Local and Stores) and rest from the bike taxi business. Since the lockdown induced by the pandemic brought the bike taxi business to a standstill, we increased our focus on accelerating the logistics business during the time which makes up for 30 per cent of our current total business revenue,” added Sanka. As far as market share is concerned, Rapido remained the market leader even post Covid followed by Uber Moto and Ola Bikes in the bike taxi segment for the September quarter including B2B businesses, Chachan added without disclosing figures.