Manikandan Thangarathnam, senior director of mobility and platforms engineering at Uber, told ET that Uber is in talks with a long list of taxi companies to integrate its services across the world and there are multiple companies it is having discussions with in India as well.
“We have a list of companies where they are interested in integrating. We have a priority, we are going through that priority and India is at the top list of priorities that are part of the action plan during the course of this year. This year you should see some integrations happening,” he said.
Uber started third-party taxi integration two years ago and plans to scale up the third-party taxi from 50 to 500 cities globally. It is already present in cities across the US, Europe and markets like Hong Kong. The company has set a target of onboarding all taxis in the world through its third-party integration onto the Uber platform by 2025.
“Third-party taxi integration is one of the top five priorities for Uber globally and most of the engineering work is being done from here in India,” said Thangarathnam. He said that a team of 25 engineers from its tech team in India helped rewire the company’s software backend to enable this.
In India, ride-hailing companies have been facing an acute shortage of cabs on their app and have been finding it difficult to meet the demand, especially post-pandemic.
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ET reported on May 22, 2022, that rising fuel combined with the lesser incentives from ride-hailing companies pushed drivers out of the platforms. Over the last two years, there has been a sharp drop in new registrations of commercial taxis.Newer, category-specific players have also emerged offering a better experience to customers post-pandemic, as ET reported on July 25, 2022.
At a time when tech companies are cutting down on growth and focussing on improving profitability, including Uber, its third-party taxi integration will help Uber double its growth even as the company continues to improve profitability. Uber can now enter smaller cities by partnering with third-party taxi companies.
“This is a quick way for us to enter new markets, new cities where we are not operating,” Thangarathnam said. “If we do this right, we can expand into multiple cities and multiple countries and increase our revenue. Customers will be super happy because of the better supply. Now we can guarantee that magical experience which Uber has been known for.”
Uber’s emphasis on onboarding traditional taxi operators is a marked shift from the way the company started in its initial years. Founder Travis Kalanick wanted to disrupt the traditional taxi companies by onboarding any driver, even the ones without a yellow cab or the licence to operate a taxi, to ferry passengers and earn from the app.
How are third-party taxis different from regular Uber?
Unlike the regular Uber drivers, called first-party drivers, Uber third-party taxi drivers do not use an Uber rider app and they work for the traditional taxi companies which have existed for years in major cities across the world like New York and London.
Thangarathram said third-party taxis are critical in solving the problem of lack of supply of cabs that have been plaguing ride-hailing apps post-pandemic. Uber will initially work with large taxi operators, with large fleet size and who have some software or technology in place with which Uber can integrate.
Uber’s third-party software will integrate with the software of the third-party taxi companies and will act as an “operating system” for the taxi companies. Uber will also charge a commission, which may be different from what they charge their regular first-party drivers.
“Taxi companies have also evolved and they have some software and tech in place. Driving demand is a problem. For Uber, demand is there, but supply is the problem. That is why we have the vision that all taxis be on Uber by 2025,” Thangarathnam said.
He said that in whichever cities the company has started its third-party integration, there has been a significant improvement in its services, and in turn revenue.
“There has been an improvement in our C/R metric, which is the completion of ride requests compared to the total ride requests we received,” he said.
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