Upstarts and political pressures are forcing Uber to play by new rules as they reshape India’s ride-hailing economy.

India’s homegrown ride-hailing startups are forcing Uber to rethink its strategy. In February, the Silicon Valley giant ditched its commission-based pricing for two- and three-wheeler segments, allowing drivers to pay as little as nine rupees (11 cents) for a daily subscription.

An Uber spokesperson said the company had recognized the market trend set by rivals and had adopted a similar strategy in the low-cost mobility segment to remain competitive.

Dr D Dhanuraj, Founder-Chairman of CPPR, while speaking to Cheena Kapoor of Rest of World on the topic, shared his insights.

“Any uptick in growth, particularly in offering different platforms with varying attributes (like the subscription model presently used by Uber), is an interesting development for a large market like India. This can lead to changes in the policy regulations and reforms in the Indian transport sector. If that happens, there will be a lot to learn from the Indian market,”

Dhanuraj is quoted as saying.

He also spoke on the public technology initiative by the GOI—the Open Network for Digital Commerce (ONDC), launched in 2022—which promotes a decentralized, open-source online commerce model that allows buyers and sellers to transact across different platforms without being tied to a specific app or website.

Uber had signed a pact with ONDC to explore potential integration, which hasn’t happened yet.

“Uber has invested heavily in their proprietary technology, and they may not easily give up their edge by joining the ONDC platform. ONDC is a decentralized model, and Uber is a centralized model. Uber is also facing many challenges in many states, and I don’t think Uber wants to get exposed to government oversight,”

Dhanuraj commented.

Read the full article by Rest of World here.

Views expressed by the author are personal and need not reflect or represent the views of the Centre for Public Policy Research.