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Nishant Mittal

Entrepreneur, musici...ย โ€ขย 13h

So after 15 years of burning over โ‚น30,000 Cr in cab hailing, Uber (and Ola) are now finding out that Cabs don't really work in India. Uber says "three out of every five trips in India are now on two and three-wheelers". Well. No shyt, Sherlock. You didn't need to burn 15 years and โ‚น30,000 Cr to understand that Indians can't afford AC cabs at that scale. It was obvious. But somehow, it wasn't as obvious to the Uber-rich: Genius VCs, their consulting peers, analysts, associates, and the likes. Back in 2016, when I used to ask, "Don't you think people who can actually afford AC cabs in India are very limited? And that would make the market for Cabs too small to justify such investments?", VCs used to scoff at my naivety and fake American accent while saying, "Aw man. It's so great, I don't own a KAWR anymowr! This is disruption!". And then it began! Pradhan Mantri Venture Capital Ameer Kalyan Yojana on steroids! Companies got Billions of Dollars to give "free rides" to customers, and "incentives" to drivers. For years, they subsidised both sides of the marketplace from their pockets, all in the name of "growth" and "capturing market share". These artificial discounts and bonuses were the bedrock(s) upon which these companies were built. And what happened next? After years of making unimaginable losses, as soon as these companies withdrew those discounts and incentives, both customers and drivers fled as if they were trying to avoid the plague. Drivers canceled trips, customers cried. And then, quite inevitably, went back to taking a bus, metro, or - no prizes for guessing - an auto. Well, it's a $10 Bil story. But my questions were always fundamental. When compared to US' $80k & China's $12k, India's GDP per capita is around $2800 (around โ‚น2.4 Lakh/year, which was even lesser back then). How many cabs rides do you think can the Average Aakash making โ‚น2L/year take? Maybe once a month? And that's when he's feeling rich. But thanks to Uber & Ola's generous discounts, even Aakash took a cab every week, because it was free (or cheaper than an auto-rickshaw). This was the destruction of the market these guys excelled in. This was never sustainable. No matter who said what, this is was just murder of common sense. Now Aakash is back to taking a bus, making the market much smaller, as it always was. And Ola/Uber, after collectively burning all that money in the last decade, have suddenly found God after getting overtaken by Rapido in number of trips. Rapido, which until now, primarily operated bike taxis (and autos). It's all quite silly. But now, what happens to the oversupply of drivers that were tricked into joining these apps with those fake incentives? That's a good question. Anyway, whenever I write these things, some say, "Oh, it's easier to say now that it's all happened". No. None of this is "benefit of hindsight". I wrote this first in 2015. For a long time, money talked. BS walked. As it often does. But eventually, truth finds a way.

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