BluSmart, Indian Taxi Startup, Challenges Uber In An EV Fight

BluSmart, an Indian ride-hailing startup, is attempting to compete with Uber and Ola for market share in the nation by placing investments on an all-electric taxi fleet and making an aggressive effort to lure customers and drivers away from the competition.

The government of Prime Minister Narendra Modi is likely to make big changes to India's transportation sector in the coming years, with considerable ramifications for ride-hailing companies.

A complete switch to electric vehicles (EVs) is expected to be a challenging endeavor for market leaders Uber and SoftBank-backed Ola, especially as both companies have difficulties with driver retention and consumer satisfaction.

BluSmart, a new player, hopes to take advantage of the opportunity by outperforming its competitors that use combustion engines in terms of electrification, cleanliness, and dependability by directly managing its fleet and drivers. To begin with, drivers are unable to cancel reservations made through the BluSmart app.

"BluSmart has cracked quality of service with clean cars which are on time. Having your own fleet allows you to do that,"  according to Jasmeet Khurana, who oversees the World Economic Forum's (WEF) mobility decarbonization effort. It made use of the switch to electricity to gain entry.

Uber's difficulties have also being leveraged by BluSmart to win over investors.

According to a March private BluSmart investor presentation acquired by Reuters,  "Uber is losing drivers, riders and market share in India", and its growth model of driver-owners is "crashing" amid soaring fuel prices.

A request for comment from Uber regarding the story was not answered, but the firm's India chief, Prabhjeet Singh, told in February that the company was adding more drivers and vehicles each month and will keep addressing service issues.

Uber began operating in India in 2013 with low rates for customers and high pay for drivers. Ola, a domestic rival, debuted in 2010.

Both companies experienced great success in India but have now faltered as a result of high cancellation rates for riders and driver discontent over diminished financial incentives that led to many quitting. Ola declined to comment when contacted.

In 2020, BluSmart, supported by BP's venture business, began with providing airport transportation in Delhi and later scheduled reservations. Bengaluru has been included to the expansion.

In Delhi, BluSmart was the owner of 80% of the 2,750 new electric taxis that were registered between January and October 2022. According to data from the consultant Redseer, EVs made up 25% of the city's new taxis, up from just 3% in 2019.

In the city's capital, BluSmart has 22 charging and parking hubs, one of which is on the top floor of a multi-level parking structure controlled by private security in an exclusive neighborhood where more than 100 vehicles receive thorough cleaning every evening.

According to Statista, India, which has a population of 1.4 billion, offers a significant business opportunity with a ride-hailing market of $13.4 billion, less than one-tenth the size of China's, and a penetration rate of just 7%.

By 2030, Modi wants 30% of all new cars sold to be electric, and several states are pushing for more environmentally friendly taxis.

Anmol Singh Jaggi, the CEO of BluSmart, told  that the company intends to increase its fleet to 14,000 cabs the following year and to 100,000 in five years, add four more cities, and provide more immediate bookings, similar to Uber.

By June, the business's fleet will incorporate customized compact EVs made by the Indian company Gensol Engineering, enabling fare reductions.

Only a small EV will be able to reach the mainstream market, according to Jaggi.

With 5,000 vehicles operating in just two cities, BluSmart claims to have a 9% market share of the ride-hailing industry in Delhi. With 300,000 users across more than 100 Indian cities, Uber holds a 43% national market share.

While BluSmart's fleet includes more expensive EVs like MG Motor and BYD, it is now limited in the number of vehicles it can purchase from Tata Motors, the only affordable EV manufacturer in India.

In January, Ola stated that it will introduce 10,000 EVs onto its platform but provided no timeframe.

Uber's India head Singh rejected worries about BluSmart in February, claiming that Uber still provided more varied ride options, such as scooters and autorickshaws.

The company internally recognizes BluSmart as a threat, and its own EV effort is part of its fightback, according to a business official with firsthand knowledge of Uber's thinking.

According to a business job posting on LinkedIn, Uber plans to have a 100% electric car fleet globally by 2040 and is aiming for more than 1 million such vehicles in India and South Asia, calling them "a key piece" of their regional expansion strategy.

In its initial effort, Uber said in February that it will introduce 25,000 Tata EVs into India and work with fleet managers to oversee their maintenance, just like BluSmart does.