App-Based Mobility in Urban India

Since the early 2010s, app-based mobility services like Ola and Uber have become essential in urban India. This market is characterized by a few dominant platforms, frequent driver protests, and a balance between affordability for users and driver viability.

Introduction of Bharat Taxi

• Bharat Taxi, a driver-owned cooperative platform, is a new competitor in the ride-hailing market, historically dominated by a near duopoly.
• The platform features a zero-commission structure and surge-free pricing, making drivers co-owners and promising to direct all profits to them.
• Potential benefits for drivers include higher earnings, a sense of ownership, and welfare-linked support (e.g., retirement savings, insurance).
• Users may experience more predictable fares and fewer hidden charges, due to incentives not being solely driven by shareholder returns.

Market Shift and Competitive Pressure

• Rapido initiated a shift in 2023 by adopting a subscription-based model, allowing drivers to retain full fares in exchange for a small daily or monthly fee.
• This move provided cost predictability for drivers and reduced resentment over high commissions (30-35%).
• Such innovations have pressured larger incumbents to adapt, highlighting the need for business model innovation.

Sustainability Concerns for Zero-Commission Model

A zero-commission model may not be sustainable long-term as it decouples platform revenue from market demand, potentially limiting scalability unless alternative monetization methods are found.

Policy and Regulatory Considerations

• While the cooperative model is welcome, any government support must be cautious to avoid uneven enforcement or regulatory asymmetry.
• State involvement may weaken market incentives, necessitating vigilance from the Competition Commission of India to ensure fair competition.
• A level playing field should exist where cooperative and private models compete on merit.

Overall, Bharat Taxi's entry can enhance India's mobility ecosystem by broadening competition and experimenting with driver-centric ownership models.