This is how I see the business model of Uber / Ola evolve in India:

  • Phase 1: Pay INR 2600 to drivers for staying logged in to the network for 14 hours regardless of the number of trips done or amount of fare billed (“show up”)
  • Phase 2: Pay INR 2600 for doing 14 rides regardless of the amount of fare billed
  • Phase 3: Pay INR 2600 for billing INR 2600 in fares (“eat what you kill”)
  • Phase 4: Alert drivers that company will eventually levy a commission – but not charge it yet
  • Phase 5: Turn on a switch in the software to start charging 15% commission – and, boom, create a billion dollar business overnight.

(Actual figures may vary slightly from city to city)

You can find more details in How Cab Aggregators Switched On A Billion Dollar Business Overnight and Cab Aggregators: Exhibit-A For A New-Age Digital Business.

PS: Incidentally, this was my most upvoted Quora answer in 2019.