The Venture Intelligence Blog

A CNBC article titled Can Uber win in India after China loss  quotes Venture Intelligence data on funding in the taxi space: Ola, one of the most celebrated start-up stories in India can afford this cracking expansion because it is flush with funds, including $1.2 billion from investors over the past four years, according to Venture Intelligence.   Venture capitalists funding to Indian start-ups is down about 30 percent so far this year compared to last year, according to industry estimates. Total funding, for example, in the taxi booking space till mid-November 2016 was just $1 million, compared to over $1 billion in 2015, according to Venture Intelligence. After selling to Didi Chuxing in China "Uber can't lose another market to a local player". What are the opportunities and challenges for Uber? India is our single largest market outside of the United States and the merger with Didi has freed up resources for additional focus." Amit Jain, president of ...

Shreyas Bharadwaj  of Swarajya does a detailed coverage of how players in the taxi industry are affecting changes to regulations through the prism of Bruce Yandle's Bootleggers and Baptists . "..many states in the United States (US) had laws which banned the sale of alcohol on Sundays (the days Christians go to church). These laws were not only supported by conservative baptists , who viewed alcohol as demonic, but also by bootleggers (illegal traffickers of alcohol) who made good money selling alcohol illegally on Sundays at higher prices. While baptists would publicly lobby for the Sunday ban on the sale of alcohol, bootleggers would help out local politicians who were (and are) perennially in need of re-election funding. The law banning Sunday sales would contain no provision for banning the consumption of alcohol." And what about the consumer? The answer is simple; they get the short end of the stick. The higher prices due to the ban make their poc...

Deepak Shenoy of Capital Mind has an interesting post on MediaNam a titled "The Economics of Using Uber in India". Extracts: Uber advertises its lowest fare in Bangalore at Rs. 7 per km charge but that is utter bull. For an average 10 km ride in the city, it costs much more: a Rs. 35 base charge that has no free usage, which would be Rs. 3.5 per km. Rs. 7 per kilometer run Rs. 1 per minute as a driver fee. For an average of 3 minutes per kilometer this comes to Rs. 3 per km. These add up to Rs. 13.5 per kilometer. That’s how much you pay for an auto as well. ...The annual costs of a car are tiny nowadays (Rs. 1 per kilometer, assuming Rs. 12,000 service costs for Rs. 12,000 driven). So if my car gives me 12 kms to a liter of petrol, i’m still paying just Rs. 5.5 per km for petrol and Rs. 1 for parking. Add to this the convenience of owning a car, the ability to get groceries from hypermarkets that can’t or won’t deliver, the ability to drive your kids to a location...

Mint has a blow-by-blow account. Hats off to Raghunandan G for being so open. Extracts from the article - that reminded me a lot of the John Maynard Keynes quote "Markets can remain irrational longer than you can remain solvent": Ola’s rival, across town, TFS, was watching the firm’s every move closely. Ola’s logic was clear. The company had raised Rs.250 crore in a round of funding in July 2014 and was burning money to get more customers and drivers on its platform. In the process, it was losing as much as Rs.200 on every ride.  ...On 1 November, TFS decided to play the game. It came up with a simple strategy. Thanks to the higher per km rates, consumers weren’t using the service for short distance travel. So, at the consumer end, TFS dropped rates. To Rs.49 for the first 4km and then Rs.14 per km. But at the driver’s end, it needed to incentivize drivers to pick up rides. So it held on to the old rates for drivers (Rs.200 for the first 10km). So if a customer was pa...