A COMPARATIVE STUDY OF OLA AND UBER CUSTOMERS IN MUMBAI

Dr. Rupali Rajesh 1

Snehal Chincholkar 2
1
Faculty of Management, Vivekanand Education Society’s Institute of Management Studies and Research,
Mumbai, India
2
Faculty of Management, Vivekanand Education Society’s Institute of Management Studies and Research,
Mumbai, India
 A COMPARATIVE STUDY OF OLA AND UBER CUSTOMERS IN MUMBAI

ABSTRACT
Organized rental cab was introduced in Indian market in 2004 with Meru cab service and soon became
popular among consumers on metropolitan cities but actual revolution came in 2010 when app based services
started its operation, followed by Uber in 2013. Soon market became competitive and consumers became
more demanding. Now companies are using various strategies to bring more customers as well as to retain
their old customers. This study is focused on identify the difference between Ola and Uber customers and for
this data has been collected with the help of structured questionnaire. Data was collected from Mumbai and
specifically from working professionals. After data collection, statistical analysis showed that female prefer
Uber service over Ola but while it comes to safety consumer feel more safe with Ola than Uber. Result of this
study may help the taxi service industry to design their future marketing strategies.

Key words: Demographic factors, Ola service, Uber service, Customers.

INTRODUCTION

Concept of organized rental cab was introduced to Indian consumer in 2004 when Meru cab service was
launched in major metro cities of India and then almost after six years App based rental cab service was
introduced in Indian market. Among various transportation mode cab service gained popularity because of its
advantage of door to door service and now because of technological advancement customers were able to
book cabs at competitive price in just one click using their smart phones. These App based cab services were
having tremendous potential for growth in densely populated countries like India where parking is major
problem because of space crunch as well as public transports are over cowered during peak hours. Slowly
this convenient mode of travel started gaining popularity and competition became dense after Uber’s launch
in 2013.

As customers have become more demanding it’s a challenging job for rental cab industry to meet the
customer’s expectations. Now a days not just the price but quality service also plays an important role in
customer satisfaction. Now using a smart phone consumer can access, compare, evaluate and purchase. In
this situations App based services such as Ola or Uber Cabs offered solution by offering various services
ranging from the economic to ultimate luxury. As per a current report in the financial express introduction of
App based pre-paid taxi services like Uber and Ola taxi not only grabbed customers’ attention but also
contributed in increasing employability by providing opportunity to drivers.

Ola cabs service was started in 2010 in Mumbai by ANI Technologies Pvt. Ltd. based on online cab
aggregator concept. Ola offers range of affordable transportation service staring from superior luxury cars to Ola
auto. Currently it is available on 102 cities and approximately 450,000 vehicles are available with them 1.  While Uber
Technologies Inc. is an American worldwide online transportation Network Company founded as Uber Cab
by Garrett Camp in 2009. In August 2013 Uber expanded to Indian market by launching its services in
Bangalore 2.

Both Uber and OLA entered the taxi services market in India having many similarities, such as concept of
taxi aggregators, air conditioned taxi services, cheap price and app-based taxi services, luring passengers of
major metropolitan cities.
_________________________________________________________________________________________________________________________________
1
https://www.olacabs.com/info/about_us
2
Prithivi, Swsthy (August 29, 2013). "Hello India! secret users have arrived in Bangalore". Uber Blog. Uber. Retrieved February 8,
2016.

Ola and Uber have grown tremendously over a period of time with an objective of solving the inter-city and
intra-city commuting problems of customers. These companies are spending huge funds in marketing,
competitive price and recruitments of new drivers which leading to expansions of new markets (Sharma and
Das, 2017). Sometimes these strategies resulted in very less priced services, even less than the fares charges
by 3- wheeler auto rickshaws (Mumbai Grahak Panchayat, 2017).
Ever changing technology is fueling the growth of organized car rental industry, convenience of booking cab
service sitting at your place is one of the most important feature of this app based taxi service. Currently Ola
and Uber are two major players in organized cab service sector in India. In a report by Industry: companies in
September 2016 Ola showed to capture70 % Indian market (Figure: 1)3.

Figure: 1 Ola Vs Uber3

While in 2017 a report by RegaliX Research 4suggested that Uber is Young India’s most preferred app based
taxis service with 55% usage while Ola has 41% usage. Report also concluded that Uber is no.1 cab service
with high customer satisfaction, economy, safety & ‘recommend to friend & family’ across India.
_______________________________________________________________________________________
3
https://www.forbes.com/sites/krnkashyap/2016/09/21/its-uber-vs-ola-for-the-battle-of-supremacy-in-the-indian
market/#672bfe9fd99f
4
https://regalix.com/wp-content/uploads/2017/10/Uber-Vs.-Ola-And-Travel-Pattern-Of-Young-India_2017-4.pdf

One more survey by Mumbai Graham Panchayat5, 2017 concluded that 80% of respondents feel that Uber/
Ola are offering better option of travel than traditional taxis services in Mumbai. And almost 67% of
respondents are satisfied with behavior of Uber/Ola drivers while 14% found it as average followed by 19 %
found it as bad.

LITERATURE REVIEW

Call taxi system in India has grown significantly in India and infrastructure growth, growth of middle class,
increasing disposable incomes and growing GDP are some of the factors responsible. The rise of the BPO
industry is one of the reason to growth of this sector because of odd working hours. This growth can be seen
more in metropolitan cities of India (Rahman, 2014) and there is intense competition among various
operators like Ola, Uber, Radio cabs, Yellow cabs and Meru etc. So to sustain in this competitive market it is
necessary to understand the users of the rental cab service. Various studies and researches have been done to
understand the factors important while choosing a rental car.

Call taxi app (CTA) helped in increasing perceived usefulness, ease of use, playfulness and subjective norms
(Peng et. al.,2014).This also helps in convenience of tracing user and service provider (Chen ,2014). A study
by Lu et al (2015) suggested that self- service mobile technologies give control to commuters to access lot of
information with the help of technology. Horsu and Yeboah (2015) had revealed in their study that driver
behavior have negative correlation on customer satisfaction in Ghana. Other variables continuous service,
comfort, reliability and affordability have an impact on customer satisfaction with regard to minicab taxi.
One study by Paronda et al (2016) identified the key performance indicators of conventional taxis which
includes reliability, travel speed, passenger expenses and quality of service. Study based on surveys for 30
days concluded that Uber and GrabCar offers better quality services than conventional taxis. For Indian
market similar studies have been done, a research by Hanif and Sagar (2016) suggested that cab services has a
huge potential for growth in Mumbai targeting middle and affluent class. Consumer not only use cab service
for commutation but also for visiting a shopping mall, attending late night party or going out on special
occasion. Study also showed that customer satisfaction level is very high, showing positive sign for future
growth and expansion of business.
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5
http://unctad.org/meetings/en/Presentation/cicplp2017c7_ccContributionbyShirishDeshpande_en.pdf

Aggregator taxi companies ‘s tied up with the mobile wallets companies like Free Charge, PayTM,
Mobikiwiki which helped in providing hazel free ride to customers by providing customers easy payment
options with offers and discounts for rides (Kavita and Rajeswari ,2016). Consumer’s preference for online
transaction push Uber to create taxi service portal as well as Uber is also started spending on various
marketing strategies and information technology.

Ruchi et al (2017) studied various factors of dynamics of Indian taxi markets such as pricing, their revenue
models, market share etc. Utsav Pandya et al (2017) identified technology trends, safety, and price, ease of
availability, comfort and payment options affecting public taxi market. Sarit Prava Das et al (2017) identified
convenience, quality services, transparency and safety as most important parameters for selecting pre booked
taxis. A study by Kumar and Kumar (2016) showed that consumers were interested to redeem coupons while
selecting cab services and were comfortable to redeem coupons through mobile apps while booking cab
services. With customers, service providers are also important in any service industry, in this regard a
research by Ruchika Malik (2017) identified that retaining drivers by initiatives like monetary awards of
influence customer decision. Ola is using reward systems to motivate their drivers thus motivating them as
well as involving them in resolving the customer grievances to build a loyal base of drivers. On other side
Uber offers rewards and discounts under their Uber CLUB program. This program is not only design impact
drivers but is also designed to help their family by providing them various offers related to automobile
insurance, vehicle maintenance, lifestyle, health and wellness to their everyday life. There are three
categories Silver, Gold and Diamond, based on the quality and performance of each driver. One more
comparatively study of Ola and Uber by Allamdas Rohit H. (2017) suggested that as Indian consumers and
highly price-sensitive and very less brand loyal, companies need to design new packages to attract new
customers and to keep existing customers. Similar research by Shukla et al (2017) on OLA and UBER
suggested, to adopt highly innovative and customer-centric strategies to increase market share

Therefore, it would not be that easy for both the companies Ola and Uber to operate in an environment which
has to be more customer-centric & target oriented, highly innovative, and have resistant to pressure from the
regulatory authorities and keep delighting their customers.
OBJECTIVE OF STUDY

Considering the growing number of online cab users in Mumbai this research is designed to understand the
difference between Ola and Uber users. Research is specifically focused on working professionals. The sub
objectives of this study are:

 To find out the difference between Ola and Uber User’s demographic profile.
 To identify the consumer perception towards safety of Ola and Uber services.
 To identify the difference between satisfactions levels for both cab services.

RESEARCH METHODOLOGY

This research is focused on Ola and Uber users in Mumbai area and specifically targeted to working
professionals. After literature review gaps have been identified and questionnaire has been designed to
collect the data. Primary data for the study was collected through online survey method, using a structured
questionnaire which was designed based on literature review. All the responded were from Mumbai and data
was collected from February 2017 to March 2017.To full fill the Objectives and based on literature review
following hypothesis and sub hypothesis have been designed.

H1: There is significant difference between demographic profile of Ola and Uber users.
H11: Gender has significant impact on choice of cab services.
H12: Age has significant impact on choice of cab services.
H12: Income has significant impact on choice of cab services.
H2: There is significant difference between Ola and Uber consumer’s perception towards safety.
H3: There is significant difference between Ola and Uber consumers satisfaction level.

DATA ANAYLYSIS AND FINDINGS

After data collection data has been analyzed using SPSS and finding of same is as follows. Total number of
respondents were 103 out of which 51 were Ola users and 52 were Uber users. Demographic profile of all
103 respondents are explained in Table: 1.
 Table 1: Demographic profile of respondents

N=51
Gender    
Male 60 58.3%
Female 43 41.7%
Age    
<25 19 18.4 %
25 to <40 41 39.8%
40 to < 60 25 24.3%
60 and Above 18 17.5%
Monthly Income    
< Rs 15000 / Month 39 37.9 %
Rs 15000/- to < 30000/ Month 43 41.7 %
Rs. 500001 – 1000000/ annum 16 15.5%
> Rs 1000000/ annum 5 4.9 %
 

Hypothesis Testing

To identify the difference between demographic profile of Ola and Uber users’ including impact of
gender, income and age, hypothesis have been tested using Chi square test. The result obtained
indicated that gender has significant impact on choice of cab service as p value was 0.023 < 0.05
(Table: 2(b)) so null hypothesis has been rejected. Table: 2(a) also indicated that female prefer Uber
cab service over Ola.

H11: Gender has significant impact on choice of cab services.

Table: 2(a) Impact of gender on choice of cab services

 Name of Service * Gender Crosstabulation
Count
Gender
Female Male Total
Name of Service Ola 24 27 51
Uber 36 16 52
Total 60 43 103

Table: 2(b) Impact of gender on choice of cab services

Chi-Square Tests
Asymp. Sig. Exact Sig. (2- Exact Sig. (1-
Value df (2-sided) sided) sided)
Pearson Chi-Square 5.205a 1 .023
b
Continuity Correction 4.333 1 .037
Likelihood Ratio 5.252 1 .022
Fisher's Exact Test .028 .018
Linear-by-Linear
5.154 1 .023
Association
N of Valid Casesb 103
a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 21.29.
b. Computed only for a 2x2 table

To study the impact of income hypothesis H 12 has been tested and result indicated that there is no significant
impact of income on choice of cab services as p ( 0.542) >0.05 ( Table:3) and null hypothesis has been
accepted.
H12: Income has significant impact on choice of cab services.
 Table: 3 Impact of income on choice of cab services

Chi-Square Tests
Value df Asymp. Sig. (2-sided)
Pearson Chi-Square 2.152a 3 .542
Likelihood Ratio 2.166 3 .539
Linear-by-Linear
.129 1 .719
Association
N of Valid Cases 103
To study the impact of age, hypothesis H13 has been tested and result indicated that there is no significant
impact of age on choice of cab services as p (0.195) >0.05 (Table:4) and null hypothesis has been accepted.
H13: Age has significant impact on choice of cab services.
Table: 4 Impact of age on choice of cab services
Chi-Square Tests

Value df Asymp. Sig. (2-sided)

Pearson Chi-
4.700a 3 .195
Square
Likelihood Ratio
4.852 3 .183

Linear-by-Linear
1.063 1 .303
Association
To
N of Valid Cases
103

a. 2 cells (25.0%) have expected count less than 5. The minimum expected count is 2.48.

compare customer’s perception of safety towards both the cab services hypothesis H 2 has been tested and
result indicated there is difference between consumer’s perception towards safety for both the cab services as
p value(0.006) <0.05. Consumers feel more safe with Ola cab service than Uber (Table:5(b) ,Figure:1).
H2: There is significant difference between Ola and Uber consumers perception towards safety.
Table: 5 (a) Consumer Perception towards Safety.
 Name of Service * I feel Safe while traveling with cab including night travel. Crosstabulation
Count
I feel Safe while traveling with cab including
night travel.
Yes No Total
Name of Service Ola 37 14 51
Uber 24 28 52
Total 61 42 103

Chi-Square Tests

Value df Asymp. Sig. (2-sided)

Pearson Chi-Square
7.428a 1 .006

Continuity Correctionb
6.375 1 .012

Likelihood Ratio
7.539 1 .006

Fisher's Exact Test

Linear-by-Linear Association
7.356 1 .007

N of Valid Casesb
103

a. 0 cells (.0%) have expected count less than 5. The minimum expected count is 20.80.

b. Computed only for a 2x2 table

Table: 5 (b) Consumer Perception towards Safety

 Figure:1 Consumer Perception towards Safety

To compare customer’s satisfaction level towards both the cab services hypothesis H 3 has been tested and
result indicated there is no difference between consumer’s satisfaction level for both the cab services as p
value(0.233) >0.05.

H3: There is significant difference between Ola and Uber Consumers satisfaction level.
Table:6 Consumer’s Satisfaction Level
Chi-Square Tests

Value df Asymp. Sig. (2-sided)

Pearson Chi-Square 5.580a 4 .233
Likelihood Ratio 6.012 4 .198
Linear-by-Linear Association .152 1 .697
N of Valid Cases 103
a. 4 cells (40.0%) have expected count less than 5. The minimum expected count is .50.
So overall it can be concluded that female prefer Uber service over Ola but while it comes to safety consumer
feel safer with Ola than Uber.

MANERGERIAL IMPLEMETATION AND CONCLUSION

Aggregator taxi services are having bright future in India and specifically in metropolitan cities where
parking and long distance are big challenges. This study tried to identify the difference between consumers of
two major organized taxi service players in India. This study may help the taxi service industry to design
their marketing strategies and design their customer relationship plans. As well they can also improve where
they are lacking such as in case of customer’s perception about safety Uber services showed a gap. Similarly
as study suggested female consumers prefer Uber over Ola, Ola cab service may work on strategies to
increase female consumers. More detailed study may give a more authentic conclusion and can increase its
impact on managerial decisions.

LIMITATIONS OF THE STUDY AND FUTURE RESEARCH

As any research is not complete and always have a scope of further research, this research too have further
scope. As Data was collected only from Mumbai region and only for working profession, result represents
only small part of population. In future further research should be done with more varied sample with more
geographically spread. So, there is scope of further research and further research will give more
comprehensive conclusion about aggregator taxi services in India.

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