UberPOOL: How Uber is slowly becoming a monopoly in Delhi

I recently moved to Gurgaon and decided not to bring back my car. I have witnessed how UberPOOL has scaled its services in Delhi NCR and I bet if it continues the way it is - it will soon be a monopoly. 

Uber's Go To Market Strategy

During my first few weeks in Gurgaon, I tried OLA, OLAshare, UberGo and UberPOOL. I quickly found out that UberPOOL was the cheapest ride in the city by far. At least about 50% cheaper than any of the services OLA offered including OLAshare (even if we keep the services at par, this makes a huge difference). The decision was made in favor of UberPOOL. 

Initially, the ridership was low, and about 80% of the times I was riding alone to the office. OMG! A 50% discount on your taxi ride is irresistible.  

Understanding the customer:  2 riders for the cost of 1

However, the key reason that helped me and my family adapt to UberPOOL was the option to use UberPOOL as a couple. You won't realize this is so important, until you ride with your family.  And most importantly, it allows 2 people to ride at the same cost. Hence my weekend family trips for simple tasks such as grocery shopping, visiting schools for our child or meeting friends and family were rather affordable. We now solely rely on UberPOOL.

Our decision to bring back our car has been postponed further. 

Making business sense: UberPOOL's dynamic pricing

Unlike Ola, Uber does not give a straight 35-50% discount on UberPOOL. The pricing is highly dynamic.

On the routes where the probability of finding a co-rider is lower, UberPOOL gives a much lower discount of 10-15%; nudging the user to take a UberGo, thus reducing unwanted cash burn as it grows. An excellent product strategy for sure!

Another important decision was to limit UberPOOL to day hours. Post 10 pm, use UberGo or UberX. 

Great Pricing + Driver Incentives = Anytime availability 

That UberPOOL has become extremely popular is evident from the fact that my morning trip is no longer solo. 9 out of 10 times I have a co-ride. The drivers are happy, because they are doing more rides and it's becoming easier to earn incentives. 

How Uber will make money: Scaling to 3 pickups per trip

Right from the beginning UberPOOL is designed to pickup 3 or more riders per trip. However most people started booking 2 seats, to reduce number of pickups along the way. As anyone would have expected, Uber has now started charging 20% extra for the second seat that you book. So, you as a rider have decide what you want - either pay 20% extra to expedite the trip or allow that 3rd rider to take the vacant seat. Simple, isn't it?

So on my way to office - I was paying about Rs. 75 for UberGo - but with UberPOOL, at scale, the total fare goes up to Rs. 120 (about Rs. 40 each for 3 riders). A win-win for the customer, the driver and Uber.

Sharing a ride with 2 people is slightly inconvenient because the ride time has increased, something one has to live with for the convenience of a driver at a much lower cost. Also it is still much better than a shuttle bus which would end up making 2 stops and yet not drop me to my door step. 

What's yet to be seen is how the pricing and availability changes once Uber stops doling out incentives. And with OLA slowly decreasing the incentives (or so it seems) that time won't be too far. 

ABOUT THE AUTHOR:

Ashish Poddar is a product strategist - currently working at Cardekho.com, India's leading auto portal and runs an e-commerce portal, Kadambri Teas for delivering super-tasting teas directly from Assam all over India. He has 10 years of experience working in scrappy startups, making sense out of nonsense. An MBA from the Indian School of Business, Hyderabad and a psuedo-engineer from IIT Kharagpur, Ashish is passionate about startups, reading and discussing history, philosophy and human behavior. Reach out to him by clicking the FOLLOW button on Linkedin, on Twitter @ashishpoddar13 , and on Facebook, facebook.com/ashish.poddar.393