Author: Rishita Gupta
Read Time: 5-7 mins
May 24, 2024
Namma Yatri Vs Ola and Uber: Which Rideshare Is Better?
Namma Yatri Vs Ola and Uber: Which Rideshare Is Better?
Namma Yatri Vs Ola and Uber: Which Rideshare Is Better?
Author: Rishita Gupta
Read Time: 5-7 mins
May 24, 2024
Have you ever used Ola or Uber to book a ride, especially in metro cities like Bengaluru? There is a good chance that you would have experienced things like these: non-availability of a ride, long waiting times, and if you end up getting a ride, the driver asks you to pay extra money. Additionally, another issue more rampant in smaller cities is payment in cash. Cab drivers generally prefer offline payment rather than online mode. Why is that? Why is this cab-hailing model, which was primarily introduced by Ola and Uber in India, failing today? Let's understand this with the help of an example.
Let's say Ram is an auto driver in a city like Bengaluru. Every day he works for 12-14 hours and makes Rs 2000. He first has to give a 30% commission to these existing players (Ola and Uber), and after this, whatever leftover amount he receives is credited to his account after 2-3 weeks. During this period, Ram has to pay for things like gas and maintenance of his auto out of his pocket, which can be a huge burden for people who generally don't have enough savings. Because of all this, the cab-hailing model was in crisis.
Under the leadership of Namma Yatri and the ONDC framework, a quiet revolution is taking place in the busy world of cab hailing. What started out as an answer to the annoyances of drivers in big cities like Bengaluru has quickly evolved into a serious threat to market leaders like Ola and Uber.
Have you ever used Ola or Uber to book a ride, especially in metro cities like Bengaluru? There is a good chance that you would have experienced things like these: non-availability of a ride, long waiting times, and if you end up getting a ride, the driver asks you to pay extra money. Additionally, another issue more rampant in smaller cities is payment in cash. Cab drivers generally prefer offline payment rather than online mode. Why is that? Why is this cab-hailing model, which was primarily introduced by Ola and Uber in India, failing today? Let's understand this with the help of an example.
Let's say Ram is an auto driver in a city like Bengaluru. Every day he works for 12-14 hours and makes Rs 2000. He first has to give a 30% commission to these existing players (Ola and Uber), and after this, whatever leftover amount he receives is credited to his account after 2-3 weeks. During this period, Ram has to pay for things like gas and maintenance of his auto out of his pocket, which can be a huge burden for people who generally don't have enough savings. Because of all this, the cab-hailing model was in crisis.
Under the leadership of Namma Yatri and the ONDC framework, a quiet revolution is taking place in the busy world of cab hailing. What started out as an answer to the annoyances of drivers in big cities like Bengaluru has quickly evolved into a serious threat to market leaders like Ola and Uber.
This new business model was introduced in the cab-hailing sector: "The Zero Commission Model", primarily led by Namma Yatri, which is part of the government-led ONDC. The idea behind this model is fairly simple; the platform does not charge any commission from the drivers. This brings up the question: How will it make money? The answer is subscriptions. Instead of charging a commission on every ride, Namma Yatri introduced a fixed subscription fee of Rs 25 per day for unlimited rides or Rs 3.5 for less than 10 rides a day. This means that no matter how many rides a driver does in a day or how much money he makes, he doesn't have to pay more than Rs 35 a day! And this model seems to be working.
This new business model was introduced in the cab-hailing sector: "The Zero Commission Model", primarily led by Namma Yatri, which is part of the government-led ONDC. The idea behind this model is fairly simple; the platform does not charge any commission from the drivers. This brings up the question: How will it make money? The answer is subscriptions. Instead of charging a commission on every ride, Namma Yatri introduced a fixed subscription fee of Rs 25 per day for unlimited rides or Rs 3.5 for less than 10 rides a day. This means that no matter how many rides a driver does in a day or how much money he makes, he doesn't have to pay more than Rs 35 a day! And this model seems to be working.
[Image Source : The Economic Times]
Let's take the example of Ram again. He is working with Namma Yatri and makes Rs 2000 a day. Unlike the earlier model, this time he only has to pay Rs 25 as a subscription fee to Namma Yatri and will take home Rs 1975. On top of that, he will get the money right then and there from the customer, as Namma Yatri only allows payment through UPI or cash, ensuring the money goes directly into the driver's pocket. The drivers seem to be loving it! Since its launch in November 2022, more than 3 lakh drivers have joined Namma Yatri, and now its success is being replicated in other cities in India. In addition to the zero commission feature, Namma Yatri has more reasons to be happy. Earlier, when Ola and Uber collected money from the customers and later passed it on to the drivers, they had to pay 5% GST on these earnings. Since Namma Yatri is just connecting the drivers with the customers, this 5% GST is not applicable anymore, and because of this, both drivers and customers are satisfied.
[Image Source : The Economic Times]
Let's take the example of Ram again. He is working with Namma Yatri and makes Rs 2000 a day. Unlike the earlier model, this time he only has to pay Rs 25 as a subscription fee to Namma Yatri and will take home Rs 1975. On top of that, he will get the money right then and there from the customer, as Namma Yatri only allows payment through UPI or cash, ensuring the money goes directly into the driver's pocket. The drivers seem to be loving it! Since its launch in November 2022, more than 3 lakh drivers have joined Namma Yatri, and now its success is being replicated in other cities in India. In addition to the zero commission feature, Namma Yatri has more reasons to be happy. Earlier, when Ola and Uber collected money from the customers and later passed it on to the drivers, they had to pay 5% GST on these earnings. Since Namma Yatri is just connecting the drivers with the customers, this 5% GST is not applicable anymore, and because of this, both drivers and customers are satisfied.
This subscription-based zero commission model by Namma Yatri was first adopted by Rapido. During the announcement, Rapido's founders said that this model will bring down the margins for the company, which shows that they were forced to adopt that model. Once Rapido adopted this model, Ola and Uber started to face the heat, as the competition from Namma Yatri and Rapido was starting to get fierce. Drivers were leaving them for Namma Yatri and Rapido. Scared of losing business, Ola and Uber too recently announced that they will be launching their own subscription-based model for drivers. Even though they won't be able to control prices and collect payments from customers like before, they don't have any other choice.
Namma Yatri has compelled them to adopt this new model, and it seems Namma Yatri isn't done yet. It is now set to disrupt the bread and butter of Ola and Uber, 'The Cab Hailing business.'
Just a week after Ola and Uber announced their own subscription model for auto drivers, Namma Yatri decided to launch their Cab Hailing business in Bengaluru. They have introduced the same zero-commission subscription-based model for the cabs as well, and this is a massive development in this sector.
This subscription-based zero commission model by Namma Yatri was first adopted by Rapido. During the announcement, Rapido's founders said that this model will bring down the margins for the company, which shows that they were forced to adopt that model. Once Rapido adopted this model, Ola and Uber started to face the heat, as the competition from Namma Yatri and Rapido was starting to get fierce. Drivers were leaving them for Namma Yatri and Rapido. Scared of losing business, Ola and Uber too recently announced that they will be launching their own subscription-based model for drivers. Even though they won't be able to control prices and collect payments from customers like before, they don't have any other choice.
Namma Yatri has compelled them to adopt this new model, and it seems Namma Yatri isn't done yet. It is now set to disrupt the bread and butter of Ola and Uber, 'The Cab Hailing business.'
Just a week after Ola and Uber announced their own subscription model for auto drivers, Namma Yatri decided to launch their Cab Hailing business in Bengaluru. They have introduced the same zero-commission subscription-based model for the cabs as well, and this is a massive development in this sector.
[Image Source : Finshots]
Is this the end of the dominance of Ola and Uber in the Cab Hailing business?
With its novel zero-commission subscription-based business model, Namma Yatri is upending the dominance of Ola and Uber in the cab-hailing market. From its start, Namma Yatri has drawn over 3 lakh drivers by prioritizing their welfare with low subscription fees and instant payment mechanisms, indicating a substantial shift in driver loyalty. The company's recent entry into the cab hailing industry further confirms their impact and proves that their disruption is not limited to cars. Namma Yatri has shown how a driver-centric strategy can transform the market by utilizing the ONDC framework. This has forced even the biggest companies in the sector, like Ola and Uber, to change or risk becoming obsolete. This change highlights the influence of platforms that put the needs of their users first and adhere to ethical standards, ultimately changing the taxi industry in India.
Are you looking to revolutionize your online selling experience?
We at SellerSetu, provide you with a quick, affordable, and seamless way to go live on ONDC and unlock endless opportunities to sell your products online.
If you want a demo or have any questions, please reach out to us using the contact form below.
[Image Source : Finshots]
Is this the end of the dominance of Ola and Uber in the Cab Hailing business?
With its novel zero-commission subscription-based business model, Namma Yatri is upending the dominance of Ola and Uber in the cab-hailing market. From its start, Namma Yatri has drawn over 3 lakh drivers by prioritizing their welfare with low subscription fees and instant payment mechanisms, indicating a substantial shift in driver loyalty. The company's recent entry into the cab hailing industry further confirms their impact and proves that their disruption is not limited to cars. Namma Yatri has shown how a driver-centric strategy can transform the market by utilizing the ONDC framework. This has forced even the biggest companies in the sector, like Ola and Uber, to change or risk becoming obsolete. This change highlights the influence of platforms that put the needs of their users first and adhere to ethical standards, ultimately changing the taxi industry in India.
Are you looking to revolutionize your online selling experience?
We at SellerSetu, provide you with a quick, affordable, and seamless way to go live on ONDC and unlock endless opportunities to sell your products online.
If you want a demo or have any questions, please reach out to us using the contact form below.
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Are You Ready To Start A Successful Journey On ONDC ?
Join the growing community of successful sellers who trust SellerSetu for their online selling needs. Start selling on the best online marketplace on ONDC. Fill out this form, and our team will reach out to you within the next 24 hours.
Are You Ready To Start A Successful Journey On ONDC ?
Join the growing community of successful sellers who trust SellerSetu for their online selling needs. Start selling on the best online marketplace on ONDC. Fill out this form, and our team will reach out to you within the next 24 hours.