The price war triggered by Olacabs has intensified in the city. After Olacabs stunned everyone by offering cab service at autorickshaw prices, rival Meru has responded by coming up with a similar option.
Meru on Monday said it would offer a new cab service called ‘Genie’ at the rate of Rs12.50 per kilometre. The cab will have a base fare of Rs100 for first six kilometre, same as Olacabs.
“I feel there is a consumer for every product. Just because there are small cars in the market, people in the country have not stopped buying big cars. Hence, I feel that introduction of Genie cabs will not cannibalise into our other products,” said Siddhartha Pahwa, chief executive officer, Meru.
Sayan Ghosh, a media professional, welcomed the arrival of such cab services. “Travelling short distances and paying Rs19 or Rs20 per kilometre did not make much sense for a middle-class person. Autos invariably ask for more than what comes on the meter.”
However, experts feel such price war is not sustainable in the long run. Also, a reduction by 50 paise or so doesn’t really matter to a consumer who is travelling short distances. “These cabs are aimed at people who travel by auto. For short distances, it does not really matter if there is a difference of 50 paise between rates. What matters is how quick the cab arrives, how good are its services etc,” said a consumer expert.
Other players in the market are preferring to wait and watch. “I do not want to get into this price war as of now. From the beginning, we have been offering our services at Rs13 per km. Hence, we are there already. There is going to be more competition, but only between the existing players. It will be difficult for new players to enter the market,” said Aprameya Radhakrishna, founder and director, Taxiforsure.
There are around 10 known cab brands in Bangalore. However, the number of unorganised players are huge and growing
According to estimates, around 85 pc of the cab market in the city is still unorganised
In 2012, the car rental market witnessed a growth of 14 pc in terms of value