Taxi app Uber is going all out to woo new drivers. First it offered LCD TVs and iPhones through lotteries to its cabbies along with bonus money per trip for plying in the festive week and now it has reportedly tied up with lenders to launch a vehicle financing program for cab drivers in India so that taxi drivers can easily own a car within a couple of days.
Uber has partnered with lending companies including AU Financiers, Shriram Transport Finance and Toyota Financial Services, as well as automobile manufacturers like Mahindra, Maruti Suzuki-Tata Motors and Toyota for this initiative. Thanks to this interested drivers can purchase vehicles with a down payment of Rs 60,000 with subsidised interest rates and financing terms.
"Shriram Transport Finance is glad to join hands with Uber. We will provide loans to the partner drivers of Uber. The association will facilitate us to expand our passenger car financing business. The pact is a win-win deal for all the parties involved. Shriram Transport Finance and Uber encourages ‘Drivers cum Owner’ business model and the drivers get easy financing. Since, Uber ensures enough business to these drivers so that their vehicles are fully utilized thus assuring us of our EMI payments," said Umesh Revankar, MD & CEO, Shriram Transport Finance in a statement.
However, the drivers will need to be active partners on Uber's platform with no other clauses attached to the scheme.
Apart from this, Uber provides other incentives including minimum income guarantee for certain hours, reference bonus and incentive per trip to lure drivers to clock in more hours. But Uber will need to have to do more to up its ante since it is not the only one in the game providing incentives and aiding drivers with financing.
"With Vehicle Financing, Uber takes a large step forward in its endeavour to create entrepreneurs in every section of society. We have now empowered individuals and have created an ecosystem that will enable hundreds of thousands of young Indians to become new business owners," Uber India said in a statement.
Ola Cabs — that leads the India cab market in terms of size with a network of 11,000 drivers across 9 cities -- and which recently received $210 million of funding from Japan's Softbank, empowers drivers to become entrepreneurs too.
Ola too has worked with leading financial institutions that provide loans to help prospective drivers buy their cars outright, and also offers training to ensure drivers are equipped to deliver a quality and safe experience for passengers, according to this Nextweb report.
In April, Ola tied up with auto maker Mahindra & Mahindra to offer cars to drivers and operators at discounted prices with suitable finance options and according to this Economic Times report, Ola's drivers which got the best rating were recently awarded with LCD TVs and washing machines.
" In Mumbai, Olacabs is doling out Rs 1,000 to every Black-Yellow cab driver for the first week regardless of the number of rides they do. The caveat is that driver cannot refuse a ride whenever summoned," the report added.
And this war between cab service firms is going to get even more intense. The Financial Times reported that Uber is planning to raise at least $1 billion more in capital from its existing investors, which include Blackrock, TPG, Google Ventures (capital investment arm of Google ) and Menlo Ventures, and new funds from beyond Wall Street and Silicon Valley, especially in Asia.
The company still has $1 billion in the bank from its most recent round of funding. Flush with funds, Uber and Ola Cabs are likely to use the money not only for expansion but also to act as guarantors for the financing of vehicles to new drivers.
Uber has partnered with lending companies including AU Financiers, Shriram Transport Finance and Toyota Financial Services, as well as automobile manufacturers like Mahindra, Maruti Suzuki-Tata Motors and Toyota for this initiative. Thanks to this interested drivers can purchase vehicles with a down payment of Rs 60,000 with subsidised interest rates and financing terms.
"Shriram Transport Finance is glad to join hands with Uber. We will provide loans to the partner drivers of Uber. The association will facilitate us to expand our passenger car financing business. The pact is a win-win deal for all the parties involved. Shriram Transport Finance and Uber encourages ‘Drivers cum Owner’ business model and the drivers get easy financing. Since, Uber ensures enough business to these drivers so that their vehicles are fully utilized thus assuring us of our EMI payments," said Umesh Revankar, MD & CEO, Shriram Transport Finance in a statement.
However, the drivers will need to be active partners on Uber's platform with no other clauses attached to the scheme.
Apart from this, Uber provides other incentives including minimum income guarantee for certain hours, reference bonus and incentive per trip to lure drivers to clock in more hours. But Uber will need to have to do more to up its ante since it is not the only one in the game providing incentives and aiding drivers with financing.
"With Vehicle Financing, Uber takes a large step forward in its endeavour to create entrepreneurs in every section of society. We have now empowered individuals and have created an ecosystem that will enable hundreds of thousands of young Indians to become new business owners," Uber India said in a statement.
Ola Cabs — that leads the India cab market in terms of size with a network of 11,000 drivers across 9 cities -- and which recently received $210 million of funding from Japan's Softbank, empowers drivers to become entrepreneurs too.
Ola too has worked with leading financial institutions that provide loans to help prospective drivers buy their cars outright, and also offers training to ensure drivers are equipped to deliver a quality and safe experience for passengers, according to this Nextweb report.
In April, Ola tied up with auto maker Mahindra & Mahindra to offer cars to drivers and operators at discounted prices with suitable finance options and according to this Economic Times report, Ola's drivers which got the best rating were recently awarded with LCD TVs and washing machines.
" In Mumbai, Olacabs is doling out Rs 1,000 to every Black-Yellow cab driver for the first week regardless of the number of rides they do. The caveat is that driver cannot refuse a ride whenever summoned," the report added.
And this war between cab service firms is going to get even more intense. The Financial Times reported that Uber is planning to raise at least $1 billion more in capital from its existing investors, which include Blackrock, TPG, Google Ventures (capital investment arm of Google ) and Menlo Ventures, and new funds from beyond Wall Street and Silicon Valley, especially in Asia.
The company still has $1 billion in the bank from its most recent round of funding. Flush with funds, Uber and Ola Cabs are likely to use the money not only for expansion but also to act as guarantors for the financing of vehicles to new drivers.
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