What is Uber Doing in India?

Uber has been having a rough time in India, but how bad is it?

Economics of the Uber Drivers:

  • Drivers are intelligent. They are aware of the economics and the politics of auto drivers
  • They are honest and call each trip a duty. However, they are prone to “abusing the system” which I will get to later.
  • The current economic situation is not normal and they are scared of things changing
  • Most of them are on other networks like Ola and TaxiForSure, there is no loyalty to Uber other than the money
  • They will tell you they’re being mercenary. They know that if you pay X, they get 3X and Uber pays for the rest.Uber-Pune-Car-Fleet

Economics of the Uber Business:

Uber is often preffered because it is cashless through PayTM or credit card. Ola’s cashless system uses Ola Money, which is a waste of time because you can’t use it anywhere else. Drivers might even cancel your trip if you say you’re using it. PayTM offers cash backs on purchases that you can use towards Uber.

Uber says that it has the lowest fare in Bangalore at Rs. 7 per km, but they actually charge Rs. 13.5 per kilometer.

So, should you just get a car instead? The annual costs of having a car are much smaller now. If your car gives you 12 kms to a liter of petrol at Rs. 1 per kilometer, you are still paying only Rs. 5.5 per km for petrol and maybe Rs. 1 for parking. There is also the convenience of owning a car – getting groceries from hypermarkets that won’t deliver and driving your kids to school.

There is another reason why a car is better. Uber cars are not always available when you need them. Wait times are over 10 minutes most of the time unless you are in a very popular area. There are also a lot of surge prices, which Uber is known for.

So let’s go back to the driver. For 12 rides a day, he gets Rs. 1200, plus a Rs. 100 per ride incentive, plus Rs. 100 per ride as fare which equals almost Rs. 1800. Then he pays Uber 25%. That comes out to Rs. 3500 per day. However, most drivers claim to make about Rs. 2,000 per day so that’s around Rs. 45,000 per month. After the EMI, fuel costs and service, he is left with Rs. 20,000.

uber-e1409187758464Economics of Uber’s Marketing Expense:

  • Uber only gets what you pay, which is about Rs. 150 per ride.
  • After my calculations, Uber still have Rs. 1,200 per day of net losses
  • For 12,000 drivers, that’s Rs. 15 million per day or $250,000.
  • That’s a los of $7.5 million per month in Bangalore alone.

In my opinion, Uber needs to reduce incentives and increase charges. They need to increase them by at least 2.5 times just to break even. Will the Indian market pay that much?

The Future Is Here – Ultra Pods

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In a small-scale experiment, 21 passenger pods have carried more than 1,000 passengers every day between the terminal and Business Car Park at Heathrow Airport. The five-minute ride entails crossing over seven roads and two rivers. Commissioned by the Heathrow Airport Holding Limited and built by the UK-based Ultra Global PRT, the pods have logged over one million miles and demonstrated cost savings, environmental impact and user-friendliness.

There is no type of railway needed. The ultra pods are actual cars with rubber tires, batteries and all. They are 12ft long, 5ft wide and 6ft tall with enough space for six people and their luggage. At 1,870lbs with a 141lb battery pack, the ultra pod can reach 25mphr while only drawing 2kW of electricity. The pods have a self-monitored battery level and when it needs to, it will excuse itself at station stops for charging.

Environmentally, the ultra pods are very impressive. The system already meets the new Kyoto Protocol 2050 projections. The pods have a 50% reduction in per-passenger carbon emissions compared with diesel-powered buses and 70% when compared with cars. Heathrow claims that the ultra pods have replaced 70,000 bus journeys each year. Another major plus is that 80% of passengers do not need to wait for a pod – the maximum wait time is 10 seconds.

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Inside the pod, touch screens let riders select their destination – of which at Heathrow, only offers two options right now. As the doors open, a recorded voice welcomes the rider. Once the passenger presses “Close doors” and “Start” then the pod backs out of its parking spot and glides away from the station.

Obviously, this closed-course vehicle was much easier to build rather than one for the open road such as the Google self-driving car. Sure, it can’t navigate roadway interchanges, pedestrians and non-autonomous vehicles, but there are a lot of advantages. The pods are made of mostly easy to find hardware parts, are reliable and the lightweight of the infrastructure makes it almost 10 times more resource efficient than usual road or railway systems.

Ultra has ambitious plans for the future of the pods. Right now, they are working with Indian investors to build a 4.8-mile circuit in the city of Amritsar, north of New Delhi. The network will have seven stations and more than 200 pods to transport up to 50,000 passengers per day.

It’s not hard to think of all of the different ways that these pods can be used – here comes the future of private autonomous transportation.