Uber plans to expand its UberCommute service across India, but the path it is hoping to travel is likely more complicated than it is anticipating.
Early this year, Uber quietly began testing UberCommute in New Delhi and Bengaluru cities in India. The program allows anyone with a car to join its platform and share ride with fellow commuters for a fee.
Shortly after its launch, the Karnataka government accused Uber of violating transport department rules by facilitating unregulated use of private vehicles for commercial usage. The company has been tight lipped on UberCommute’s performance so far, but it is now eyeing a nation-wide expansion of UberCommute.
Uber’s India policy head, Shweta Rajpal Kohli, says the company is “keen to support the government in every way possible and help use carpooling and ride-sharing as solutions to address the rising pollution and congestion in the city.”
Speaking to Economic Times, she added, “services like Uber can instantly match passengers headed in the same direction at the same time, thereby reducing the number of duplicate journeys.” Uber’s efforts could help reduce carbon footprint, but what’s holding the company back is domestic regulations.
The country’s current Motor Vehicles Act requires private vehicle owners to pay annual taxes and possess a badge to ferry passengers, and the cars are also required to be annually inspected. Because other taxis are required to pay taxes, if Uber gets its way, there could be a lot of friction from taxi unions. It will be interesting how the government approaches the issue.
The move comes as both Uber and Ola have been aggressively attempting to lure drivers to their respective platforms. Both the companies have partnered with car makers to offer training and enticing leasing programs to make it easier for those drivers to afford a car.
Because of the local economy, it is more difficult for Uber and Ola to currently get a driver on their platform. With their ongoing efforts with leasing programs, Uber helps drivers who otherwise wouldn’t have access to finance and ability to purchase vehicles, according to analysts. But if the government allowed private vehicles on the platform for commercial usage, it could draw the interest of many.