Mahindra Group chairman Anand Mahindra today opined that

taxi-hailing apps like Uber and Ola are the biggest potential
threat to the automotive industry, which must create new
products that customers love to own and not just use as a
means of transport.
"The age of access being offered by taxi-hailing apps like Uber
and Ola is the biggest potential threat to auto industry. Since
these apps operators have made transpiration a commodity,
(auto) sales could be hit and volumes get impacted," Mahindra
said here.
He was talking to reporters after launching M&M's first compact
SUV, TUV300, from an all new platform at the company's plant
in Chakan, Pune.
Mahindra said the problem gets confounded as "a lot of
youngsters who can own vehicles today don't want to own one,
but only need access to transportation ."
Mahindra, however, expressed hope "people will own those
things which they love" and called upon the auto industry to
create products with passion so that they induce a desire in
customers to buy cars and not just meet their automotive
needs.
"The job of automobile manufacturers is to passionately build
something that others love to own," he said.
It can be noted that US-based taxi-hailing app Uber, which
despite running into some troubles following the rape of a
woman passenger by one of its drivers last December in Delhi
and other regulatory hurdles, is investing USD 1 billion here so
that it can ramp up its daily ridership to 1 million by March next
year.
Uber wants to increase its India presence from the present 18
cities. Industry estimates peg Uber's daily rides at around
2,00,000.

Similarly, its domestic rival Ola, which leads the market in

terms of number of taxis, drivers and riderships by a wider
margin, is also getting millions of dollars of investments to
increase its market share. Ola is backed by Japanese and
American firms and a clutch of other investors.
Others like Meru and Tabcab which are also growing rapidly and
such app and phone-based taxi services are tilting the balance
against cars faster than expected.
Low cost of ridership is forcing many people in over-crowded
cities like Mumbai, Delhi and Bengaluru to opt to just hail taxis
and not buy vehicles.
While Uber charges Rs 10-13 per km, Ola offers at around Rs
13-16 per km, thus making a daily tax ride much cheaper than
owning a financed car.
Mahindra further said the impact of the current age of access is
that "a lot of people, who can afford a vehicle are deciding
against owning one. They just need access to transport. So, our
job is to offer wider choices to consumers with more innovative
models."

For generations of Indians, owning a car has been a status symbol, a

clear statement of having arrived in life. The desire to buy new cars has
led to choked roads and rising pollution in all major cities, as
infrastructure struggles to keep pace with the car-buying frenzy.
So everyone took notice when Anand Mahindra, the chairman and
managing director of Mahindra & Mahindra, said that taxi-hailing
services such as Ola and Uber might push customers to choose
commuting in cabs than own cars. I have no doubt that it is going to
affect the world and it is going to affect the volumes in the auto industry.
Young people very rarely need to own anything, he said.
That in turn would hit auto sales volumes. It is not going to happen
overnight, but it might be coming sooner than what people would have
predicted, before the taxi-hailing apps arrived.
The shift in preference away from owning cars has happened in other
parts of the world, in cities like San Francisco, New York and London for
example, which have excellent public transit systems and parking is
expensive.
Millennials, who are more conscious about the environment and prefer
spending on gadgets than cars, mostly opt for the subway or metro than
navigating their way through the citys streets.
The situation in India was different. It was only in the early part of this
century that car ownership really took off, with a host of foreign players
setting up their own factories to churn out small and mid-size

cars. Maruti Suzuki, Indias largest car company by sales, also ramped
up its own production to cut wait times and meet burgeoning demand
from a new generation for whom owning a car was finally feasible, as
incomes rose. Finance companies tied up with sales outlets to offer easy
loans. Today, you can even buy a car online on sites such as Quikr, the
classifieds portal.
In Delhi, Indias largest car market, 1,400 cars are bought everyday and
India is among the fastest growing car markets in the world. Until a year
ago, it seemed far-fetched to even think of a future where people wont
want to buy cars, despite the costs to the environment.
In 2014, San Francisco-based Uber disrupted the way traditional cab
companies operated in India, as it did in most other places it entered.
Neighborhood taxi stands in Delhi were often unreliable and over-charge
customers. Other taxi services such as Meru and EasyCabs had way
fewer cabs than demand, and booking them was a hassle over phone.
The situation was even worse in smaller towns, many of which never had
organized cab operators, who account for just ten per cent of the $15
billion market nationwide.
Uber quickly grew as it attracted customers who wanted a seamless way
to book cabs that would arrive on time. So did Ola Cabs, its homegrown
rival that is now bigger than any other taxi operator, with plans to quickly
reach a million rides per day, and presence in 200 cities. And the
services can be as cheap as a regular auto ride.
Yes, absolutely. Uber has transformed how millions of commuters get
around their cities more reliably and safely. As a result more and more
people are re-evaluating car ownership altogether. With Uber, everyone
has access to high quality transportation options at the push of a button.
This is a game changer and not only significantly improves transport

efficiency and by reducing congestion (over time), but also increases

reliability, an Uber spokesperson said, in a chat withDEALSTREETASIA.
The phenomenon means that owning a car, with its attendant problems
of finding a parking space in Indias densely populated localities and
regular maintenance, is more expensive compared with a cab ride.
Such services are a big change and as a major responsible
manufacturer, we need to understand how this will pan out and we need
to see what role we will play in this, Mayank Pareek, president of
passenger vehicles at Tata Motors, had said in July.
Mahindra has now added his influential voice to the same issue. The
age of access is here. There is going to be increasing number of people
who would want access to transportation and not own object of
transportation. So what are the opportunities?
Selling to drivers of Ola and Uber is one way out. Currently Marutis
Swift Dezire dominates this category, just like Mahindra Logan did
when Meru used to be the dominant cab service.
Clearly, new models will have to get more appealing than the past.
And instead of treating Uber and Ola as a threat, they can leverage
the opportunity to even supplying to these
aggregators,said Gaurav Vangaal, senior analyst with IHS
Automotive.

Will the popularity of taxi services make car ownership a less popular aspiration?
Akshay Chaturvedi, business head, ZigWheels.com
Cab hailing, trip sharing (Ryde, Bla Bla Cars) and easier car B2C rental services like
Zoomcar would definitely capture a lot of need states hitherto untapped and unfulfilled. For

example: real-time requirement of a cab for travelling to an airport/railway station or a local

mall without worrying about parking. The need to avoid multiple car ownership in a
household for infrequent requirements. Getting to drive or being chauffeured in a luxury car
that one can't afford or inter-city travel on account of unavailability of train tickets.
However, having set the context, I would stick my neck out to say that in the short to midterm, these will not have any significant impact on car sales or ownerships in India. This
flows from multiple reasons - India still remains the most under-penetrated country with
respect to car ownership, the entire ecosystem of these services needs to stabilise, whether it's
regulatory framework, security concerns or the geographical footprint.
India is an extremely value conscious market. So, while the entry level pricing of an Uber
may be enticing, the moment the rates go up in future expect a lowered retention. Millions of
households who would enter the middle-class in the times to come would want to cherish
their ownership of a car which still symbolises more than just being a mobility need. Lastly,
government thrust on infrastructure and projects like smart cities would definitely mean more
cars and better ownership experience.
So, I would say that India, which anyway is fairly low on car ownership in the world (China
sells as many premium/luxury cars in the country as the overall car sales in India and sells
almost 11x of cars sold in India, annually), is not going to witness a decline in car sales
anytime soon.
Karun Arya, communications lead, South Asia and India, Uber
In today's world, as people get busier and the pace of life continues to rapidly increase,
commuters would prefer to not waste time driving in traffic and then looking for parking; it
does not make sense to be looking to try and hail a taxi or haggle with the driver either.
For decades, the way you call for transportation, use and pay for it, has not evolved. Cab
hailing services like Uber have transformed how people move around in their cities by
bringing unprecedented levels of transparency and accountability to provide a safe and
affordable alternative. This new alternative actually complements and improves existing
infrastructure, creates thousands of jobs and ensures the overall quality of service improves.
In cities across India where you have uberGO and uberX, these are some of the most
affordable options to move around, sometimes even cheaper than autos and normal taxis.
When you factor in other costs for parking, insurance and maintenance, commuting with
Uber can quickly become a more cost effective solution to car ownership.
By connecting people with a more affordable, high quality option, more people are reevaluating buying new cars, which for decades has also been a sign of social standing.

Sakshi Vij, executive director, Carzonrent India (operates Myles, a

self-drive car rental)
These services are actually a solution for car buying experience in India. It is an extension of
how the car sales will happen in the market. Consumers, today, must have alternate mode of
ownership, which may not mean committing to own the vehicle, but the product being
available to them all the time. This is where the concept of car renting and sharing stemmed
from. Globally, wherever this has happened, it has created an interesting dimension for car
manufacturers to sell their vehicles. I can exemplify from Myles' perspective where we have
collaborated with Tata Motors, which in turn shows automobile companies' belief in car
sharing services as alternate modes of transport.
Myles is a connector between consumers who want to own cars and drive them. For the
longest time, the only way to own a car was when an individual earned enough to one.
Services like ours are expanding the market, allowing the consumer to experience driving,
and these will be the probable customers for automobile companies.
Ranojoy Mukerji, auto expert
Every time a new aggregator enters the market, the sales of cars go up. With the new ruling
that aggregators have to own their own fleet of vehicles and not outsource them, the car sales
will only go up. I believe cab hailing and renting services, like Uber and Myles, will not
affect car ownership decisions in India. The Indian market is very different from that of more
developed economies like US. People will like to buy their own car.
Cab hailing services are availed by consumers for different reasons and times, but they will
not substitute it for their own car. Therefore, while such services will serve their purpose and
aid in easing out transportation woes, they will not affect the car buying decisions of
consumers at large.