Uber And Ola Launch Bike-taxi Services In India, Starting With Bengaluru

The introduction of these bike-taxis will allow them to provide their customers the option of travelling over short distances at a much lower price. "With lower operating costs, increased efficiency and potential to do more trips, bikes are clearly a scalable mode of mobility," said Pranay Jivrajka, chief operating officer of Ola. The plan will be extended to more areas in the city over the next two weeks. Their base charges have been set at Rs. 30 with an additional charge of Rs.2 for every kilometre, apart from the Rs.1 per minute ride-time charge. UberMOTO’s base fare,on the other hand, has been set at Rs.15, with an additional charge of Rs.3 per km apart from Rs.1 for every minute of ride-time.

However, several experts suggests that while this might help both companies increase their customer base, it will also result in a cash burn—by having to spend more on incentives for riders and consumers, they will lose more money with every booking.

“They will continue to work on their margins and financials but they can’t choose to not do this. For a very short distance, bike taxis are very efficient,” said Abhishek Goyal, founder of Tracxn, a start-up tracker.

While neither Uber nor Ola is the first bike-taxi provider in the country, their upperhand lies in the fact that they already have a strong customer base. As per the Karnataka state transport department, Bengaluru's roads have approximately 3.8 million two-wheelers, including motorbikes, scooters and mopeds, as opposed to 1.1 million cars as of March 2015. This means that there is no dearth of riders in the city. However, with most of them already employed as delivery personnel for e-commerce and delivery start-ups, roping them in could prove to be difficult. However, with their experience in wooing cynical cab drivers, it is safe to assume that neither of the cab aggregators are too worried about this.

However, with no other state apart from Goa and Haryana acknowledging bike-taxis as a commercial passenger transport service provider, both companies could face hurdles in the form of regulatory framework. While the two have claimed running bike-taxis do not require a specific permit, Ramegowda, the commissioner for road transport in Karnataka, said that any form of vehicle usage for commercial purposes requires a permit..