Are you tired of the “New Normal”?
If yes, spare a thought for the countless Uber / Ola drivers, and participants of the ride-sharing economy.
One of the few sectors that has found it difficult to engage with its users during the Covid-19 pandemic is the Taxi / ‘Mobility’ / ‘Ride-sharing’ market.
They are literally stuck!
Let’s take a look at how mobility players got affected by the lockdown and travel embargos, and to what extent, things improved as markets opened up.
Among the larger players, Ola and Uber saw sharp drops, primarily in the second half of March, as lockdowns were announced. The overall decline has been the worst for Shuttl, Bounce & Vogo. Rapido, and Yulu, saw dips as well, but to a lesser extent.
Is a Recovery on a Lower Base Still a Recovery?
The goal for most mobility companies right now would be to hit Pre-Covid levels of utilization. Daily Active Users (DAUs), are one way to measure this. Remember that DAUs are measured as a percentage of the overall user base — so all of these numbers are operating on a much lower total installed base (as we saw lower reach numbers across the board, earlier).
By November 2020, as compared to January 2020, most companies were still struggling to recover to Pre-Covid DAUs. Vogo’s 97% recovery is quite impressive; the overall userbase however had shrunk to 39% as of January 2020.
Is Seating Inversely Proportional to Fleet Flexibility?
One of the key factors that might be impacting these trends is the type of inventory these platforms sit on, and how flexibly they lend themselves to different use cases in an environment where people aren’t using cabs or traveling to work.
- Uber / Ola primarily have cars (often with large CNG tanks in the trunk) so it’s hard for them to do anything but carry humans. It doesn’t necessarily lend itself to a logistics use case. People are also reticent to getting back to using vehicles where others have previously sat.
- Then there’s Shuttl. Their fleet primarily consists of large and small buses. So it’s super hard to use this inventory for anything but ferrying people.
- A fleet made up of two-wheelers, on the other hand, is very flexible. Rapido has a distinct advantage here. They can use their network to transport people, or attach their riders to a logistics network and start delivering groceries and ecommerce goods.
- Even self-drive two-wheeler rentals such Yulu, Vogo, Bounce are can attach themselves to a logistics network. There are ample examples of how gig economy workers (riders) who don’t own two-wheelers — rent a bike for the day to earn extra money by making deliveries. These platforms have the added advantage that they feel safer to use in a Covid economy (they’re easy to sanitize and open air).
A look at the Numbers…
One would argue that companies whose AOV (Average Order Value) and AOF (average Order Frequency is starting to approach Pre-Covid levels will be better poised to manage and maintain their fleets than companies whose order metrics are way under the Pre-Covid levels…
A New World Order?
With each day of lower demand, ride-sharing platforms see an exodus of driver partners and customers continue to feel hesitant — until this threatens to become a vicious cycle. It is another matter that as the economy unlocks, demand will return and so will customers and driver partners. What may change is the competitive advantage (network effects) these platforms enjoyed. In many ways they’ll have to start again / rebuild lost momentum. This flux also offers opportunities for companies trying to claw away users from larger platforms.
Thanks for your time,
- Rhitu
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