Marketing is all about picking the right time to attract the audience. In this modern-competitive age, brands get very rare occasions to take the benefit of problems others are facing. Meru Cabs got one such chance because of the long strike by Uber and Ola.
At the time when these 2 giants were saying no to customers due to problems with drivers, as many as 12,000 new drivers signed up with Meru Cabs in just two weeks in Mumbai alone. Meru has confirmed about this and surely most of these used to be Uber and Ola drivers. Especially those, who are dependent on daily income from these rides to earn their livelihoods. Also, Meru only had 2000 cabs in Mumbai before the strikes and now the number of drivers count has reached 14,000.
Uber and Ola drivers went on strike in Mumbai for demands including better pay. Drivers allege that they were assured with promises of incomes of over 1 lakh a month, but are struggling to make even Rs. 20,000. Many drivers had taken their cars on loans, and are finding it hard to pay the EMIs. Last year, an Uber driver in Hyderabad had committed suicide, and an Ola driver in Bangalore had set himself on fire due to this.
Meru Cabs charge a 12% commission from drivers in comparison to the 20% commissions on average charged by Uber and Ola. Meru also pays drivers between Rs. 12 and 22 a kilometer, compared to the Rs. 6 per kilometer paid by Uber and Ola.
These higher driver incentives mean that Meru rides are more expensive than Uber and Ola rides, but it is lucrative for the drivers and without them even giants like Uber and Ola cant sustain in the market.
Uber and Ola offered rides cheaper than autos until a few years ago. Drivers were making as much as Rs 1 lakh per month. This caused Uber and Ola to run losses in the millions. To sustain the business, these companies attempted to make a comeback using two ways: raising customer fares and decreasing driver incentives. Even after these attempts, Uber and Ola are still nowhere close to being profitable and consumers are frustrated with longer waiting times and driver cancellations. Drivers have been striking for their demands all over the country.
Uber and Ola might need to increase fares in order to pay their drivers more. This will help competitors like Meru. And unlike Uber and Ola, it hasn’t burnt millions of dollars to get there. Meru was the first name to enter into the cab space in India, and if the problems continue, it might just end up having the last laugh as well.