Uber makes re-entry into autorickshaw segment, to ply in Pune, Bengaluru from next month

Ride-hailing major Uber is reportedly relaunching its AUTO service in India, almost two years after shutting down the offering in March 2016. Starting with Bengaluru and Pune, the ride-hailing behemoth will allow customers to book autorickshaw on its platform from the next month.

Uber AUTO will include all safety features available for Uber cab rides and will onboard pre-verified driver partners accredited by the authorities, reports Mint.

Earlier, Uber had halted its auto vertical in March 2016. At the time of shutdown, Uber mentioned that it was an experiment that lasted for about a year.

Meanwhile, Uber’s arch-rival Ola has been operating Ola Auto for over three years. Currently, the company claims to have 1,20,000 auto rickshaws registered on its platform across 73 cities. It also set a target to complete 2 million rides by 2017.

While the number of rides happens through Ola Auto isn’t public, it seems to have picked up significantly. Users tend to prefer auto for a shorter distance over cab service. Importantly, auto has been a missing piece for Uber.

Also Read: Ola would have profitable, had Uber been not in India: Avnish Bajaj, Founder of Matrix Partners

Lately, Ola has been trying to capture the market for tier II, tier III cities. The firm had launched ‘Ola Lite’, a lighter version of its mobile app in December last year. It could be a significant move to counter its rival ride-hailing company Uber, which is building technologies to book a ride with low bandwidth connectivity or even without smartphones.

To become a more driver-oriented company, both companies had announced free insurance cover to their driver partners.

Besides ride-hailing, Ola and Uber have also been competing in verticals like bike taxi and food delivery. Last month, the Bengaluru-based unicorn acquired Foodpanda to make a comeback in food delivery segment.

With this Ola now competes with UberEats, a food delivery arm of Uber Inc. The company seems to have been taking a leaf out of its Indonesian peer Go-Jek (also backed by Softbank). Currently, Go-Jek does more orders than Swiggy, Zomato and Foodpanda collectively.

Recently, Softbank decided to invest more than $7 billion in Uber for a 15 percent stake in the ride-hailing startup. The investment deal includes both a direct investment in the company and also a secondary transaction, buying out existing shareholders.

The Uber's mobile app has not been integrated with AUTO option yet. The re-entry of Uber in auto vertical ensures a good time for users and drivers as it's likely to engage in discounting and incentive battles with Ola.