If diversification is a good strategy, then it seems Reliance Industries has taken it too seriously.
As per reports, $89 billion worth Reliance Industries, which is India’s most profitable company, may soon venture into online taxi booking niche, which is currently dominated by Uber and Ola in India. As per various sources, Reliance has contacted several tax owners in this regard, and their services can be launched by March, 2016.
In fact, rumors are abuzz that Reliance has already bought 2000 Toyota Etios cars in Kolkata alone, which would be used for offering their new cab services.
Considering that Reliance owns Jio, which provides 4G network; and also deals with petroleum and gas products; these cabs from Reliance are rumored to be equipped with 4G connection and will be powered by their own CNG fuel.
Biggest Advantage for Reliance: CNG
It can turn out to be a unique combination of advantages, as Reliance is planning to own their own cars, get their own CNG and include 4G services as a bonus.
CNG fitted taxis incur an average cost of Rs 4/km; which would be even lowered as Reliance will provide these taxis with their own CNG. Another interesting development is the fact that Reliance will open their own exclusive CNG filling stations for their taxis, which will reduce the time taken to refill CNG in taxis.
Since last few months, Reliance had been re-opening their outlets, which can turn out to be a game changer.
Taxi aggregators such as Uber and Ola may actually find it tough to beat such a lethal combination. Reliance can, infact, introduce a whole new level of pricing, which can completely change the equations for this niche market. Just like telecom, we may witness some major shake-up in this sector now.
Reliance has refused to confirm this story as of now.
Dominance of Uber, Ola Under Threat?
In the last few months, we have observed that both Ola and Uber have gradually decreased their incentives for drivers, and this has infact caused much outrage all over the nation.
In October 2015, drivers in Bangalore vandalized Uber’s office as they were protesting that their incentives have been substantially lowered. Uber drivers in Hyderabad also protested against lowering of incentives and they did not hesitate to showcase their anger.
The same thing happened with Ola as well: In Bangalore, drivers alleged that their incentives have been drastically reduced from Rs 150 per trip to meager Rs 25. Last year, Ola drivers in Hyderabad stormed inside their Kundapur office and heavy protests ensued.
As a behemoth called Reliance enters the taxi booking niche, Uber and Ola can now feel greater heat as they will definitely need to remodel their incentives schemes, bring down the price for customer, and match Reliance all at the same time.
Meanwhile, for the end-users, it may signal another wave of heavy discounts and free rides.
Do you think that Reliance will be able to match the efficiency and technology of Uber/Ola in online taxi niche? Or will it turn out to be another half-hearted attempt at diversification by Reliance?
Do share your opinions by commenting right here!
Image: Shutterstock.com