Russian Company inDrive Lets Riders To Negotiate With Driver. Will It Break Ola, Uber Monopoly?

With the given rise in the online ride-hailing segment, we can now hardly imagine our lives without it. Ola and Uber have become indispensable parts of our lives. Strikingly this duopoly is bracing for a shakeup, with inDrive shifting the gears in this segment to take on the Indian cab market.

inDrive, a startup founded in Russia’s Siberia, is trying to make its presence known in the saturated cab market in India. With excessive advertisement hoardings across Delhi-NCR and a whole lot of metro trains wrapped in its ads, inDrive is trying to make its potential customers aware of its existence. The online cab market in India is facing a trust deficit from drivers and passengers, which could be due to frequent cancellations, the existing distorted commission structure for drivers, and exorbitant fares.

About inDrive

The start-up was founded back in 2013 in the city of Yakutsk in Siberia and firmly adheres to the belief that this pricing system is what differentiates it from the competitors in the market. Both Ola and Uber in India, decide upon the fares through an algorithm, a process that is out of the control of the driver as well as the passengers.

How inDrive is different from Ola and Uber?

The firm uses a unique pricing mechanism with a negotiation feature on it. The negotiation feature allows both drivers and passengers to initiate a ride at a mutually agreed fare. While booking a ride, a passenger can put forward the fare they are ready to pay, and drivers can put up their counter-offers until both of them agree on one price.

This perceived control over the process of deciding the ride fare has made inDrive’s proposition sound attractive to them. In an exclusive interview with The Indian Express, a driver who has been using inDrive for the last three months told,

“When you are driving through Ola and Uber, you basically have to either accept or reject what they suggest on the app. But with inDrive, I can bargain for a price that I feel is fair. It makes me feel much more in control”

inDrive started its operations by onboarding drivers in Delhi-NCR last January by capturing them as they used to line up to fill their cabs at the CNG pump

With its extensive promotional activities, it has also seen a large chunk of passengers joining the app.

A driver using inDrive said,

“Today, I am driving for the whole day, around 10-11 hours, on inDrive alone. Just yesterday I uninstalled Ola. Uber, I still use it sometimes”

Another driver said,

“There are now enough passengers on inDrive that I don’t have to use another app”

Although inDrive is tight-lipped about how many drivers it has actually managed to onboard to its platform in India, a spokesperson for the firm has told The Indian Express that there are “thousands and thousands” of drivers across several cities that have signed up for the app. Currently, the app is available in major cities like Chandigarh, Chennai, Lucknow, Kolkata, and Delhi-NCR. It plans to launch its operations in Surat, Mumbai, and Pune.

In 2022, its app saw a surge of 45 percent increase in downloads going from 42.6 million in 2021 to 61.8 million in 2022. Its user base swelled by 60 percent and revenues increased by 87 percent. The firm announced that it had achieved unicorn status earlier that year with a valuation of $1.23 billion following a funding round of $150 million.

With another trick up its sleeve, inDrive has promised that its commission from the fare of each ride will be kept lower than that of its competitors. Platforms like Ola and Uber usually take more than 25 percent of a passenger’s payment and use a typical algorithmically deduced surge pricing. So far inDrive’s commissions’ range between 9.5 percent to 10 percent of the fare.

Low commission rates

The spokesperson said that inDrive has a trial period of 3-6 months when it launches in a new city during which it does not charge any commission from the driver. But after that period ends and the platform has traction in that area, it starts taking commissions from the driver. It has started the process in cities like Chennai, Lucknow, and Ludhiana. The spokesperson said that the commission is less than 10 percent currently.

However, the drivers say that when Ola and Uber started in the Indian market they didn’t charge commissions either but things have changed massively since then.

The lower commission rates have led to fewer cancellations of rides since the drivers need to pay up less for each ride and they know exactly how much they are going to earn. However, the passengers did come up with a grievance that it doesn’t have any alert system to let the passenger know that the driver has deviated from the suggested route. The spokesperson claimed that it does have a support team that works around the clock and is available through textual messages.