Market Analysis

As per Road Transport Yearbook, there are around 1.8 million registered taxis
operating in different states of India. This includes all types of taxis organized and
unorganized.
Before the emergence of organized taxi companies, the taxi market in India has
majorly remained as an unorganized sector. Even today, a major part 88% of the
Indian taxi market is largely unorganized. However, slowly we are witnessing a
plethora of private taxi and radio cab services being launched in the country. The
organized sector is growing at a compounded annual rate of 13- 14 %. The first ones
to enter the organized Indian market were players like Meru Cabs, Mega cabs, Savaari
, Easy Cabs etc. However, taxi aggregators like Ola and Uber are now increasing their
presence in the Indian online taxi industry. A breakup of the current market presence
of these sectors is shown in the below table:
Type
Unorganized
Radio Cabs
Affiliators
Aggregators

Size
88%
7%
4%
1%

Unorganized
These are majorly the single car owners who run their car as taxi for inter-city or
intra-city travel. This is the largest sector in India comprising of 88% of the market.
With the organized cabs and taxi services moving towards the aggregator model, these
single car owners are now their most sought after targets.
Radio Cabs
Radio cabs currently acquire 7% of the Indian taxi market. In the beginning, they
showed a phenomenal growth rate of 20% over a period of 6-7 years. These began
with fleet ownership model but are now slowly moving towards aggregation model.
They have now realized that owning the cars is an asset heavy business that increases
their operation costs. The major players in this segment are Meru Cabs, Mega cabs,
Savaari, Easy Cabs.
Aggregators
TaxiForSure (TFS), Ola and Uber are the major aggregators currently operating in the
Indian taxi market. Currently, they acquire only 1 % of the market. However, in the
near future this segment is expected to grow at a pace of 30% - 40% annually and
emerge as the largest segment in the organized sector.

Market Size
The Indian radio taxi market is currently of the size between $6-$9 billion. As per
different estimates, it is forecasted to grow at a rate of 17-20% annually. There is still
huge headroom for growth and the industry is expected to grow to about $25 billion
by year 2025.

12
9
6
8

3
0

9.6

11.52

1.5
2009.0 2014.0 2015.0 2016.0

Figure : Market Size (in $ Billion US )

The organized taxi market still holds a very minor share as compared to rest of the
taxi market in India. In terms of number of cars, it constitutes only 4-5% of the
market. The rest is acquired by operators who own fleets of 2-50 cars and typically
have a presence in 1 or 2 cities.
Current Market share of Organized Taxi Services

Others 5
Uber 5
TaxiForSure
Meru Cabs

14
16

Ola Cabs
0

60
10

20

30

40

50

60

70

% Market Share

In the organized sector, Ola cabs is currently the largest player with 60% of the
market share. After the acquisition of TaxiForSure by Ola, Ola is now expected to be
holding about 70% of the same. TFS was struggling to continue to raise funds and
thus was looking for a buyer. Due to increased regulatory oversight on the online taxi
industry, TFS could not keep a check on its cash flow and thus had to merge with Ola.

A comparison of the number of vehicles and presence of the top 4 players is depicted
in below table.
Cab Operators

Ola

Uber

Meru

Taxiforsure

No. of vehicles
No of cities

25000+
100

NA
11

12000
19

15000
47

In terms of market valuation, Uber is at the top with $ 42 billion , while Ola is valued
at just $ 1 billion.
The $ 200 million acquisition of TFS by Ola marks the first consolidation in the
Indian online taxi business. Although currently far from saturation, experts estimate
that about 8 - 10 major players would remain in this business in the coming years.
Therefore, there is a lot of competition in this industry and the above acquisition
highlights the cash-intensive nature of the private money-backed business and need of
deeper pockets in fight for dominance in the booming $ 10 billion cab services
market.
Funding
Since its inception, the radio taxi segment has attracted large investments from
investors. Approximately USD 400 MM of VC money has been pumped in last 4
years in Indian market. Some of the major deals were in below years :
1. $ 103 million in 2006-2011
2. $ 7million in 2012
3. $ 30 million in 2013 ( 2 deals )
All these aggregators have been successfully able to raise money from private
investors. Ola cabs has raised a total funds of $ 276 million in 6 rounds so far. Some
of its major fund raising deals have been as below:
1. $210 million from SoftBank
2. 250 crore ($41.8 million) from Steadview Capital and Sequoia Capital
3. $20 million (as per media reports) + $3.2 million from Matrix Partners and
Tiger Global
4. $5 million from Tiger Global