The lieutenant governor of Delhi might have summarily banned Uber, after a young woman was raped by the driver of the taxi she had hired through the taxi service on Friday. But the Centre government does not feel that banning Uber is the answer.
Regulation to ensure better verification through options such as linking it to the Adhaar card would be more effective is the dominant wisdom among government circles. The US-based company, it is being felt, was providing a valuable service by increasing the employment opportunities available to drivers, and the travel options available to commuters in small towns.
Uber, just five years old, has been on an exponential growth path in the past year or so — going from 60 cities in 21 countries to over 250 cities in 50 countries. But much of its growth has been focused on Asia, especially India — since its launch here in Bangalore in October last year, it is now available in 10 more cities. In recent months, it has gone on an aggressive spree to acquire customers with a Rs 300 promotional offer.
Like many technology-powered companies, Uber's growth has been fuelled by funds from venture capitalists and private equity — just earlier this month, the company, valued at $40 billion, received $1.2 billion. This was in addition to $1.2 billion that it got in June. Much of these funds were spent to grow the company in India.
Many like Samar Prasad, a sales executive, were tempted enough to download the Uber app. Prasad used the Rs300 credit he got to pay for his journey from the airport to his residence in Noida. "The bill came to around Rs 600, and I paid Rs 300," he says.
"I recommended Uber to my wife and that got me another Rs300 loyalty credit. I used it to travel again to Munirka and the bill came to Rs 305, so I paid Rs 5 only." Prasad was clearly very happy with the deal, but now he isn't sure that he'd like his wife to use Uber when travelling alone.
Uber works on an aggregator model — that is, it doesn't own the cabs, unlike Meru or Easy Cabs. All it does is connect people who want a ride with cabs and drivers using an app that they must download and a GPS connection, collecting a commission — 20% in the case of India — for the service. Such a system can only work if the driver is trustworthy which, in the US, Uber ensures by going through the legal, criminal, social security and driving records of drivers going back seven years. So everything from accidents, crimes including sexual offense, and drug and gun-related violence get verified.
In India, say the company's officials, the lack of a central database prevents such thorough investigation into drivers' past history. After all, the alleged rapist Shiv Kumar Yadav had been cleared in a police verification four months ago.
Uber is not the only taxi aggregator in India — home-grown Ola Cabs offers a similar service and has been similarly attracting venture capital funds — it got $210 million in October this year.
For drivers like Kamal Kumar, who drives for both Uber and Meru Flexi, it has meant a steady flow of income. "I make Rs 50,000 every month. For us, Uber works well because the money just gets deposited in our account every Tuesday," he says.
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