An up-to-$100 million cash infusion from Indian conglomerate Tata announced this week underscored just how committed Uber is to attacking the South Asian market.
Uber’s Biggest India Challenge Is Itself
Uber is perpetually one step behind in India.
Elena Ermakova / Shutterstock
But money alone will not help America’s most popular ride-hailing company overcome significant challenges in India and elsewhere across the globe.
Like China, India comes with its own set of challenges. Uber arrived in August 2013 as a late-stage rival to Ola Cabs, which launched in India in January 2011. Ola is in 87 cities; Uber is in 18. Ola claims to do 750,000 daily rides while Financial Times sources put Uber at 200,000 daily. (Uber said it is on track to do a million a day by 2016.)
Ultimately, Uber’s biggest obstacle in India is the same as it is in China: Can it adapt to local practices fast enough to overcome powerful incumbents?
From a product development perspective, the answer is no, at least for now. Uber has lagged one step behind Ola in offering features tailored to local tastes such as cash payments, rickshaw transportation, stronger background checks, a car loan financing program for drivers, in-app emergency buttons and route-sharing tools for passenger safety.
“You need more direct management in India, where it’s chaotic and everyone is going to skirt the rules,” an investor in an Uber rival in India told Re/code. “Uber has learned this — they’ve decentralized management and put up teams in every location — but they’re coming from behind. They’re trying to adapt Western processes and practices to something that’s a unique market.”
For example, Uber only just introduced a cash payment option for customers in May, and that option is still not available in all its Indian markets yet. Ola Cabs, meanwhile, has had a cash payment option since launching. Uber’s localized Indian leaders, though empowered by headquarters to make key decisions, are responsible for translating an American product for the Indian market. That takes time.
Still, Uber has claimed these issues have not impeded its month-over-month growth in India. Uber is betting that India will soon become bigger than its U.S. market.
Getting there will require Uber to do what it has done best in the U.S. market: Rip off a rival’s best features and walk away with the prize. Just look at what happened to Lyft: It introduced peer-to-peer rides first, but Uber copied with UberX and spread faster. That’s ultimately what Tata is betting on.
This article originally appeared on Recode.net.
