Uber to make it easier for drivers to own a car in India

Weeks after Indian cab-hailing company Ola said it would make it easier for drivers to afford a car, its global rival Uber has expressed similar intentions for India. Uber already offers similar programs in several other markets where it operates. 

Uber said it will tap Xchange Leasing, its subsidiary that offers leases to drivers by partnering with dealerships, for Indian drivers. Through its subsidiary, the cab hailing company plans to make it easier for drivers in India to own a car. Drivers who are not able to get a credit line from a bank or a car company, will be benefited from this effort. 

Xchange Leasing is looking at purchasing cars from Maruti Suzuki and Tata, two companies Uber  has ties with for driver skilling programs, vehicle purchase and finance solutions, according to The Economic Times.

"As part of our recently launched  pan-India initiative uberShaan, our leasing program will play a big role in mobilizing the skilled workforce to become micro-entrepreneurs. With our aim to empower a million (drivers) by 2018 under uberShaan, we expect that potentially one out of five new drivers would be on the platform  through our leasing program," an Uber spokesperson told Mashable India.

The inability of a driver to afford a car acts as a barrier for some in joining Ola and Uber.
Uber’s interest in helping Indian drivers own a car comes weeks after Ola, India’s largest cab hailing service, announced a strategic partnership with Mahindra, one of India’s largest automakers. As part of the partnership, Ola’s driver partners will be offered Mahindra-Ola package, which would let them purchase Mahindra cars at special prices and also avail other offers including getting insurance premiums at subsidized cost. 

Mahindra and Ola hope the deal would generate revenues to the tune of $400 million over the next two years via vehicle sales and financing. Prior to its partnership with Mahindra, Ola also tied with Nissan Motor India last year to buy and lend cars to its drivers.  

Uber's newest push is part of its UberSHAAN initiative, through which it aims at creating one million livelihood opportunities in India by 2018. “UberSHAAN is aimed at expanding access to economic opportunities and bringing down entry barriers for micro-entrepreneurs,” the company said. (Shaan means pride in Hindi.)  

“From providing access to skill development and driver training to the unskilled; to helping trained drivers receive commercial licenses – UberSHAAN will also support entrepreneurial ambitions of licensed drivers through vehicle financing and leasing solutions,” Uber added.

The inability of a driver to afford a car is one of the biggest barriers that is preventing them from joining Ola and Uber. When these cab ride-hailing services partner with giant car manufacturers, it “helps add more drivers, who otherwise wouldn't have access to finance and ability to purchase vehicle,” Pragya Singh, vice-president at consulting firm Technopak Advisors told Mashable India. Car manufacturers see these partnerships as an additional channel for revenue, Singh added.