Cab-hailing majors Uber and Ola recognised a significant business opportunity in setting up booking kiosks and bidding parking spots inside key railway stations such as Mumbai, Delhi and Bengaluru.
However, the duo is likely to distance themselves from bidding parking spaces as it’s unviable to make money from such contracts. Uber and Ola have already exited from the allotted space at Bengaluru station.
According to a Business Standard report, both firms believe that the Rs 7 crore for which the contract was awarded is nonviable.
Two years ago, Ola and Uber collectively poured in close to Rs 200 crore in parking spots and kiosks at several railway stations. However, they have been going slow in acquiring parking rights because the return on investment isn’t encouraging.
The cab drivers also do not appear to very enthusiastic about parking their vehicles and wait for customers either. They are instead keen on staying mobile to find passengers.
As per the report, the demand at the railway stations has fallen below the companies’ expectations since people prefer prepaid auto-rickshaws and prepaid taxis. It’s worth noting that Ola and Uber had already removed kiosks booking facility from the New Delhi Railway stations.
They are now planning to shut down parking facilities completely from the aforementioned stations. If it happens, it will be a loss to the railway.
The public-owned transporter had earned Rs 20.93 crore through parking charges alone in the financial year ending March 2019.
As per Railways contract, ‘app-based cab’ service providers have been given space for parking of 10 taxis at any given point of time by paying a fixed license fee for the demarcated parking spaces.
Going further, it would be interesting to track what new plans does Indian Railways has in stock for these ride-hailing apps as they were offering a big business opportunity to them.