Guest Articles

March 4

Scott Anderson / Kyle Poplin

Weekly Roundup: Uber, DriveU, Ola and the Greedy Sharing Economy in India

This week was another reminder that there are many more players eager to get their slice of the “sharing economy” especially in India.  

Unitus Seed Fund this week announced an investment in the app-based chauffeur-service DriveU. (The impact investment fund did not reveal the value of the stake, but did repost a Livemint article on its website that put it at $1 million and included undisclosed Silicon Valley investors.)

DriveU has a very different model than Uber or its Indian rival Ola. Instead of a customer using a smartphone app to hail a private car for a lift, DriveU’s platform offers a certified driver to shuttle a customer to a destination, using that customer’s vehicle.  

“Imagine not needing a car, because you already have your own – but just a reliable, background-verified, on-demand driver, for your weekday commute, shopping and running errands, airport runs and business meetings, shuttling children or aged parents, outstation trips or simply for attending social events such as dining, concerts, weddings, parties, and bar pickups. That’s the gap being addressed by DriveU,” CEO Rahm Shastry said.

Shastry was an angel investor in the ride-hailing service TaxiForSure, which was bought by Ola for $200 million last year. DriveU launched in 2015 and is now operating in Bangalore, Chennai, Mumbai and recently started in Delhi. Since January, it has transported more than 6,000 customers taking over 15,000 trips, according to Unitus.

The crowded road of ride sharing has moved to motorbikes, too. This week, Uber launched a pilot project, uberMOTO, in Bangalore – less than a week after launching a motorbike taxi service in Bangkok. Not to be outdone, Ola countered with a bike-taxi service in Bangalore, with prices undercutting Uber. (Not everyone sees these as very safe options for commuters, incidentally.)

In a press release, Uber described uberMOTO as “another step to help cut congestion in Bangalore by getting people out of cars when they don’t need to use them, and by encouraging motorbike drivers to share their ride. … By using today’s transportation infrastructure more efficiently, Uber’s technology can help the government of Karnataka cut traffic and congestion at no extra cost to taxpayers.”

It’s a not-so-subtle appeal to government, and for obvious reasons. Regulators have applied the brakes to Uber in many markets. But apart from the obvious entrenched taxi and limo industries which stand the most to lose, the sharing economy has many detractors who warn the phenomena creates hoards of part-time contractors rather than full-time employees in a race to the bottom. Some researchers, however, have found it is the poor who are the biggest beneficiaries of peer-to-peer sharing, both as consumers and contractors. Whether similar factors will come into play in emerging markets is an open question. But considering Unitus’ focus on companies that serve and employ the base of the pyramid, it’s reasonable to suspect they see both a profitable future in ride sharing, for drivers and passengers – not to mention investors.

– Scott Anderson


When buzzwords become obsolete

A couple of recent news items left us daring to envision a day when we all look back and wonder why the modifiers “social” and “sustainable” were put in front of the words “enterprise” and “business.”

First we learned that Narayana Hrudayalaya, the innovative Indian health care chain that went public last month, has been trading at 10 percent higher than its public offering price. This, despite India’s market struggling overall, with the average stock falling 10 percent since the beginning of the year.

We wrote a couple of months ago that the eyes of the development world were on this IPO, which many considered the ultimate proving ground for Narayana founder Dr. Devi Shetty’s concept that “charity is not scalable, good business models are.”

Point made. As Makoto Kajiwara writes in Nikkei Asian Review, “Entrepreneurs and investors like Shetty, who take it for granted that businesses should have a positive impact on society, may be growing a little tired of hearing the words ‘social enterprise.’ … Perhaps the ‘social’ part of the term will one day become obsolete.”

Then there was an op-ed by Paul Polman, CEO of Unilever, in which he says that sustainability is no longer a choice: “This new generation of business leaders has realized that supporting the sustainable development agenda will help them protect their long-term performance and grow their businesses.”

He cites an Ellen MacArthur Foundation report, “Towards the Circular Economy,” which lays out the benefits of moving from the “take-make-dispose” business model to an economy that “designs out” waste: “It can generate more than $1 trillion each year and create 100,000 new jobs in the next five years, while reducing both waste and emissions.”

And somewhere along the way, could the concepts of “sustainable” and “social” become so common, so understood, that they – like the word “aircraft” attached to “jet” – appear not just dated, but completely redundant?

– Kyle Poplin


Top image credit: DriveU’s Facebook page.

Investing, Social Enterprise, Technology, Transportation
circular economy, transportation