On-demand car hire service Uber rolls out cheaper variant uberX in India

Global online luxury car hire service Uber Technologies Inc, which has operations in more than 120 cities across the globe including six in India, has launched uberX in India. The firm has initially rolled out the service in three cities including Delhi, Bangalore and Hyderabad, bringing low-cost cab rides on its platform, the company announced in a blog post.

"uberX is our low cost option that combines the same great Uber experience and reliability you know and love, with prices so affordable. Vehicles on uberX are commercially licensed, mid-range cars with seating for up to four people - think Toyota Etios and Swift Dzire," reads the post.

As per the new plan, the base fare starts at Rs 50, and post booking the customer needs to pay Rs 2 per minute and an additional Rs 15 per km. The minimum fare is Rs 150. The service is available on the web and also on the company's mobile app.

Uber, which operates premium brands globally, could be looking to capture a major share in the highly-crowded domestic market that is dominated by the likes of Olacabs, Meru, Easycabs and TaxiForSure.

It's pricing for uberX seems pretty competitive considering it is offering economy sedans at a lower price compared to the local players.

While Olacabs charges a minimum of Rs 200 with Rs 18 per km in Delhi, TaxiForSure charges a minimum of Rs 225 with Rs 16 per km in the city. Merucabs, another leading player in this space, charges Rs 200 for the first 8 kms, post which the user needs to pay Rs 23 per km. Easycabs charges Rs 69 for the first 3 km and Rs 23/km thereafter.

Olacabs, however, also has a cheaper option under the recently launched service Ola Mini, where it offers rides on hatchbacks with introductory pricing of Rs 12 per km with a base price of Rs 150 for the first 6 km.

Launched in 2009, San Francisco-headquartered Uber is one of the most heavily-funded online car hire services in the world. The company enables users to request a ride any time using its iOS and Android apps, as well as from its mobile site. Uber is simply a booking platform, and the cars are not operated by the company.

Early this month, the firm closed $1.2 billion in fresh funding from institutional investors, mutual funds, private equity and VC investors at $17 billion pre-money valuation. Uber will soon announce a second close which will take its total investment from this round to about $1.4 billion. Previously, it had received $360 million from Google Ventures and a few other investors.

Uber in India

The company started its India operation in October last year with a launch in Bangalore, followed by New Delhi, Hyderabad, Chennai and Mumbai. It recently added Pune to its city count where it operates brands like Renault Duster, Toyota Innova, Nissan Sunny, BMW 3 Series, Toyota Fortuner, Ford Fiesta and Volkswagen Vento. Uber is also looking to expand to Kolkata and Ahmedabad, where it is looking to hire local people who can act as entrepreneurs running their own startups.