Will Uber's tie-up with WhatsApp help it get an edge over Ola?

The duopolistic play in India's ride-hailing market just got interesting. American ride-hailing giant Uber and Facebook-owned messaging service WhatsApp on Thursday announced a partnership in India allowing users to book an Uber ride via Uber's official WhatsApp chatbot. In this global-first move, Uber wants to make booking a ride as easy as sending a WhatsApp message, quite literally. But where does this leave Uber's biggest competitor, the homegrown giant Ola Cabs?

"Ride hailing market is quite consolidated now. Many players came but only the two strongest ones remained. Ola is competing hard with Uber but somehow Uber has an edge here. It has become more of a duopoly kind of a market," says Karan Taurani,  senior vice-president at Elara Capital. He adds that if one were to see in terms of who will get an edge, the platform that is able to penetrate deeper into the Tier 2 and 3 markets and offer a better customer experience in terms of tech will emerge as a stronger player.

This deal, he says, will help Uber garner a deeper penetration in Tier 2 and 3 cities. "Uber's customer base has largely metro driven. They don't have a larger penetration in Tier 2 and 3 market. There's nothing better than WhatsApp which is deeply penetrated. I think the winner here is Uber as it's driving customer acquisition through WhatsApp," Taurani adds.

According to the deal, riders will no longer need to download or use the Uber app. Everything from user registration, booking a ride, and getting a trip receipt will be managed within the WhatsApp chat interface. There are three ways in which WhatsApp users can book an Uber ride: messaging to Uber's business account numbers, scanning a QR code or clicking a link directly to open an Uber WhatsApp chat. They will then be asked to provide pickup and drop off locations. Users will receive upfront fare information and the driver's expected time of arrival.

It is being rolled out on a pilot basis from Lucknow and will be further expanded to other Indian cities too. Currently, this option to book a ride via WhatsApp will only be available in English language but it will be expanded to other Indian languages soon.  "Localisation happens in every Internet segment. We've seen that with video content. Platforms like Uber and Ola, they will eventually adapt to local languages as well," Taurani adds.

This deal will not only help Uber localise more in one of its largest international markets but also help WhatsApp fuel its super app ambitions. India, with 340 million WhatsApp users, is going to be a key market for the messaging platform to push its super app goals. It has already launched its payment services and is looking to get into e-commerce in a bid to becomes a global one-stop shop for communication, shopping and transaction services.

According to a recent report by BofA Securities, India has the potential to have at least three or four super apps coming from conglomerates such as Reliance Industries and the Tata Group which have ambitions to become large tech-focused ecosystems. "The offering will also be seen from top fintech players, while WhatsApp's positioning makes it best suited to succeed as a super app," the report had argued.

Experts point out that WhatsApp is set to emerge bigger and bigger because of bundle-type partnerships like these.

"WhatsApp is like a super app. It's got the largest number of users today in India and I think this is just the beginning. WhatsApp can actually make use of its user base through other kinds of partnerships. For example, if it starts online shopping like Paytm, it will become a mix of social media, fintech, shopping, e-commerce, etc. But it's going to take its own sweet time for customers to adapt to WhatsApp as a platform from just chatting and social media to payments or e-commerce," Taurani says.

Also Read: Now, book an Uber ride on WhatsApp, feature now available in Lucknow

Also Read: Uber allows Indian users to book rides via WhatsApp