Paytm Eyeing Foray Into Ride Hailing Space With Autorickshaw Offerings

Fintech giant Paytm is planning to venture into the ride hailing space by offering auto rickshaw booking services through the open network for digital commerce (ONDC), a move that will challenge the market dominance of Ola and Uber.

The company is looking to offer these rides in Tier I cities such as Delhi, Bengaluru and Chennai, Moneycontrol reported.

Paytm is currently testing the ride-hailing feature on its app with select users and might also offer cab booking services at a later stage, the report added.

In the past two years, Paytm has piloted and rolled out several e-commerce offerings on ONDC, such as food delivery, grocery, fashion and electronics. 

Auto-rickshaws booked on the Paytm app are facilitated by ONDC-backed Namma Yatri, which offers its services to driver partners for a subscription fee, as opposed to the traditional commission structure.

Last month, Namma Yatri began offering cab booking services in Bengaluru. It also offers cab-hailing services in Kochi, Kolkata and Chennai.

In January, Namma Yatri entered the Chennai and Delhi markets to offer auto rides to customers.

Since its inception in 2022, Namma Yatri has partnered with more than 2.1 Lakh drivers, 50 Lakh customers and completed 3.3 Cr trips in seven cities, including Bengaluru, Mysuru, Hyderabad and Kolkata.

Recently, it also signed a deal with Google Maps and ONDC to enhance public transport services in the country.

The development comes at a time when the competition in India’s crowded ride-hailing sector is heating up, with the emergence of new players such as Rapido, BluSmart, and inDrive among others.

The increasing competition in the ride-hailing industry has benefitted gig workers, with platforms tweaking their business models or reducing their commission rates.

For instance, Swiggy-backed bike-taxi platform Rapido runs a subscription fee model for drivers and does not charge any commission on rides, while inDrive charges its drivers in India a commission fee of 10-12%, significantly lower than Ola and Uber’s 20-30% commission.

With the Indian cab services market getting more competitive, ride-hailing giants Ola and Uber are scrambling to introduce new measures to retain their supply.

Last month, Ola and Uber rolled out a subscription fee model for their driver partners for auto-rickshaws, doing away with the old structure of commission on auto rides.

In November last year, Uber rolled out the Uber Pro programme, offering incentives to driver partners, including area preference, discounted vehicle maintenance, motor insurance and micro-credit services.