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Uber Rides Can Now Be Paid by Cash, A Global First For Uber!

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Uber Service Tax fares Cab

For the first time ever, Uber has allowed cash mode of payment for availing their cab booking services. Cash payments have been started in Hyderabad as of now, and it is being expected that the option would be rolled out to other Indian cities very soon.

Siddharth Shanker, Uber’s general manager in Hyderabad said, “Tradition dictates that cash plays a big role for Indian consumers,” adding, “this is an experiment and a global first for Uber across our 300-plus cities. We have worked hard to create a seamless cash payment option that is truly Uber”

The dynamic growth of Uber in USA and 55 other countries have resulted mainly due to the cashless payment options provided for riders: Depending on the travel distance, the payment is deducted from the passenger’s credit card and no cash transaction takes place.

Last year in November, Uber introduced PayTm wallet as payment option in India (which enabled both debit and credit card), and in some countries, Paypal is also accepted. But this is for the first time in their short history that cash would be allowed for payments.

In order to understand ‘customer behavior’ and ‘usage trends’, they have started with Hyderabad for this experiment. As per Uber, Hyderabad was chosen because the city provides the “right environment to test a new payment option amongst a sizeable and sophisticated rider and driver community”.

Highlights of Uber Cash Payment

  • While booking a new ride, passengers need to select ‘Cash’ option for payment
  • No partial payment allowed; that is part payment via cash and part payment by PayTm
  • No booking fee or any other additional charges for users

Doing Business in India: Need for Major Changes!

From a business point of view, this decision by Uber can be termed as a revolutionary one as they have altered their entire business model itself with cash payments. Although cash-less payments are popular all over the world, in India, there are only 2 crore card holders (debit or credit) out of 120 crore population.

Uber marketing department must have observed that if they wish to grow further and faster, they will need to target those 98% population which rely on cash for payments.

This is not the first instance when a global MNC is resorting to change in order to survive in India. In 2013, McDonald shocked their shareholders when they opened their first completely vegetarian outlet in Amritsar. Never in their 60 year history with 35,000 outlets, have they opened a full veg outlet.

Similarly, Subway had to open a pure veg outlet in Ahmedabad as the area was populated with Jains and they refused to enter a food outlet which served non-veg food. Even KFC, whose name itself denotes non-veg food, had to open a pure veg outlet in Gujarat.

Response to Ola Cabs?

With 40,000 cabs across 65 Indian cities, Ola Cabs is right now commanding nearly 75-80% of the online cab market in India; and Uber is way behind them, especially after Ola acquired TaxiForSure and captured even more market space.

Ola Cabs has been accepting cash payments since long, and as per some industry watchers, this may be a direct response to counter Ola’s expansion.

If you are from Hyderabad, then do let us know your feedback after using cash mode of payment for a Uber ride.

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