Uber’s Bhushan said while membership programmes tend to be “tricky” to balance financially, the platform’s current focus is on growth. Uber’s move to bring its global membership programme to India could help the ride-hailing platform boost its competitive position, at a time when it is facing increasing rivalry from the likes of WestBridge-funded Rapido, BluSmart and Google-backed Namma Yatri, mobility industry executives and investors said.
On November 27, the company launched its loyalty programme, Uber One, in India, offering monthly and annual plans to users. As part of the programme, Uber is offering up to 10% of the fare as credits to users hailing four-wheelers, three-wheelers and two-wheelers and booking parcel services on its platform. These credits are akin to cashbacks and can be redeemed on future rides.
Globally, as of September 30, Uber One had 25 million subscribers, and according to the company, they spend more than three times compared with non-members.
In India, the company believes it could live up to the global expectations. When asked if the upside of the loyalty programme could be similar in India when compared to the global offering, Uber India’s director of central operations Nitish Bhushan told ET: “We don’t know yet…but we’ve done a lot of user research over the last seven to eight months...to make the programme suited for Indian customers”.
He downplayed rising competition as the reason behind Uber launching the programme in India.
“Uber One was launched globally with the dual benefits of delivery and mobility…and hence our priority was to roll this out in markets that had both services. Therefore, it took us some time to roll this out in India,” Bhushan said. “Uber One is not a response to competition, it’s a global programme and has been in the works,” he added.
Adding fuel to fire
Mobility industry executives said the timing of Uber One’s rollout could be seen as the company’s efforts to deal with its fast-growing rivals.
“Rapido has been growing at a fast pace and they’ve just closed a massive funding round…that’s a clear signal in my mind that the mobility space is going to witness aggressive action from the players including burning cash to bring both customers and drivers to their platforms,” a venture investor focused on the sector said. “Uber has a lot more to lose…if it doesn’t respond,” he added.
Rapido secured USD 200 million in a funding round led by WestBridge in September, and the bike taxi startup’s cofounder and chief executive Aravind Sanka had said at the time that the funds would be used to expand its four-wheeler taxi service, which competes with Ola and Uber.
Chasing growthUber’s Bhushan said while membership programmes tend to be “tricky” to balance financially, the platform’s current focus is on growth.
“Our single biggest objective is that we offer the best value proposition. For now, our focus is to do this in a financially viable way…membership programmes are tricky to balance in that manner but at the same time, the lift that we see in business is substantive enough to compensate for some of the benefits which we give,” he said.
In a September interview with ET, Uber India and South Asia president Prabhjeet Singh said that the San Francisco-based firm would continue to invest in building new products and services out of India even as it doubles down on delivering profits globally.
Over the last few years, Uber India has diversified beyond its core on-demand ride-hailing product and introduced services such as intercity rides, pre-reserved trips, store pickups and bus shuttles. It is set to bring back its top-of-the-line offering, Uber Black, to India after a hiatus of 10 years.
“The investments aren’t going in any way that comes as a trade-off to long-term profitability, but ride-hailing will be a low-margin business in the long term – particularly for a market where asset ownership cost is a significant part of what a driver has to pay,” Singh had said.
