Millennial mindset of using Ola, Uber affecting auto sector, says Nirmala Sitharaman

[padmasri]

sare mee prakaram 2 lakhs authundi anukunna it will be 500/day..

Uber or Ola ne best anipisthondi inka ela chusina...

india lo car status kosam kone vaallu..ippudu latest thinking lo status enduku bokka ani uber vaaduthunnaru.. 

[babu_bangaram]

Plus parking 

Plus cleaning of the car

plus if anyone uses driver ......

plus ippuddu trrafic challas as well 

owning car in india is expensive ............with too many options like Uber taxi, Auto, Bike, Ola bike, rail, bus

[padmasri]

35 minutes ago, babu_bangaram said:

Plus parking 

Plus cleaning of the car

plus if anyone uses driver ......

plus ippuddu trrafic challas as well 

owning car in india is expensive ............with too many options like Uber taxi, Auto, Bike, Ola bike, rail, bus

yes ,i agree.. also the increasing oil prices...its not worth at all if the uber ride is around 200 

[Mitron]

7 hours ago, hyperbole said:

Just saw this my whatsapp

*Buying a Car* v/s *Hire* a Cab : 
A superb *Analysis* 

Any car  in india cost atleast Rs. 6,00,000
Scrap value after six year -  Rs. 1,00,000
Net amount goes in effective Life of six year  Rs. 5,00,000

Nos of days of six yr is 2200 days

So Rs. 5,00,000/2200
= Rs. 230/day

Yearly insurance Rs 15000 = Rs. 41/day

Daily petrol minimum 
= Rs. 100/Day

After every 3 years Tyre & Battery change charge Rs. 25,000 i.e. = Rs. 23/day

Yearly maintenance of
Car Rs. 9000 i.e 
= Rs. 25/day

Plus interest loss on
Car buying amount
@8%on Rs. 6,00,000 = Rs 131/day                                           _______________
So after buying a new car *daily expenditure = Rs. 850/day.* 

⚖

So friends untill you pay Rs. 850 daily to hire a cab, you are effectively in gain travelling in rental car. 

OLA/UBER now available.

Above all, driving cars on the Indian roads is full of risk added with Mental tension/BP...

New hefty Traffic challans not included. 

 

Evadu compile chesado kani vadiko O veskovali 😂

[Mitron]

3 hours ago, Kool_SRG said:

Evado karudu gattina bhakt whatsapp university lo circulating ah 

Kanipettesava 

 

[johnydanylee]

Janalu meeda padi edavatam ento...thu

[Gaali_Gottam_Govinda]

 

10 hours ago, reality said:

Idhi oka daddamma mokam di... idhi FM endho mana karma... economy ni MG chepisthoo DLM kathalu..

 

Agree with you.......... FM is Total disaster........... its shocking how she's given all big cabinet portfolios  like Defence last year and Finance now.

 

 

[Kool_SRG]

Ola-Uber vs buying a car: Here's what works out cheaper

FM Nirmala Sitharaman said milennials increasingly prefer to ride Ola-Uber cabs instead of buying their own car. Here's the math.

 

Finance Minister Nirmala Sitharaman recently attributed weaker demand for automobiles to a change in millennials' habit of preferring app-based cab services such as Ola and Uber to travel, instead of buying their own cars.

The statement attracted plenty of criticism on social media, with milennials, referred loosely to as a section of the population aged between 22 and 37, saying the FM was blaming them for no reason.

The reasons for the slowdown in the auto industry are fairly well-documented -- and while it may be argued that the rise of app-based cab services such as Ola and Uber may be one factor, it is not the sole reason.

 

But if millennials, among others, are increasingly taking to Ola and Uber to travel, the choice comes down to several reasons.

Hailing a cab offers its own set of conveniences, such as not having to worry about driving in heavy traffic congestion or paying steep penalties. Then, as the FM pointed out, buying a car entails committing to a monthly EMI, which not everyone would be comfortable doing in an uncertain economic outlook.

But what about costs? How much does riding an Ola or Uber come to as opposed to buying your own vehicle?

Exact fares for Ola or Uber are difficult to estimate. They depend on the city, the class of cars avails, and even the time of the day, route taken and the expected traffic therein.

But a back-of-the-envelope calculation based on about 25 rides we have taken recently in Mumbai --  over short distances and long, during rush-hour traffic as well on non-peak hour, in the city and the suburbs -- gives us an average cost for an Ola ride at about Rs 20 per km.

Most of the rides taken were on the Ola micro or mini segment.

After talking to a number of regular users of the cab services, we concluded that the fare will not be significantly different for any other average Ola or Uber user.

Also read: Nirmala Sitharaman's millennial theory is correct: Ola, Uber do influence the ‘perfect storm’ in auto sector

So while a cab could cost you an average Rs 20 per km or therabouts, here's how the cost for car ownership pans out.

For comparison's sake, we have assumed the cost of a Wagon R (price: Rs 5.67 lakh on-road in Mumbai), a popular hatchback that is widely available in the cab fleet.

To make the calculation possible, we also had to make a bunch of other assumptions, such as:

- EMI of about Rs 9,000 (based on financing of 75 percent, for a loan of 5 years). Besides an upfront down payment of Rs 1,41,750, which works out to an amortised cost of Rs 2,362 per month. We are ignoring the opportunity cost of investing the same amount in a fixed deposit if you chose to not buy a car.

- Fuel cost: Rs 6.5 per km (assuming mileage at 12 kmpl and petrol at Rs 78 per litre)

- Maintenance cost about Rs 417 per month (Rs 5,000 per year)

- Driver's salary: Rs 15,000 per month

- Depreciation cost: Rs 4,725 per month (assuming sale of the car after 5 years of ownership at 50 percent cost, or Rs 2,83,500).

Put all of this together and, assuming a monthly run of about 1,000 km per month, you get a monthly cost of about Rs 18,280 per month if a driver's salary is not included, and Rs 33,280 if it is.

This works out to around Rs 18.3 per km or Rs 33.3 per km.

While these are strictly monetary costs, there are other qualitative factors that work in favour of buying a car, such as not having a cab driver cancel on you, the aspiration quotient that a car offers, or even a personal car coming in handy during times such as a weather disruption when cabs may not be available.

But as for the cold maths, it may be assumed that car ownership works out to roughly the same or marginally cheaper, on a per kilometre basis, if you plan to drive it. Go for a driver, and economics work out clearly in favour of cabs.

Note: An earlier version of this article had erroneously added the depreciation cost to the monthly cost instead of deducting it. The error has been rectified.

[Kool_SRG]

Ola-Uber pushing auto slump? Statistics puncture Nirmala Sitharaman's theory

Finance Minister Nirmala Sitharaman's claim negated by falling ridership in Ola and Uber, not many new vehicles being added to fleet, higher cost per km.

HIGHLIGHTS

• In Nirmala’s statement, the industry saw excuse for not slashing excise duties to prop up sales
• Industry has been clamouring for a 10% GST cut to tide over crisis but many states opposed this cut.
• Blaming Ola, Uber and quirky millennial for the crisis is a good excuse

 

Facts, numbers and economics they all belie finance Minister Nirmala Sitharaman's unique - if not bizarre - explanation to the slowdown in the country's automobile sector. She blamed the proliferation of cab aggregators like Ola and Uber and the change in the mindset of millennials who prefer to use them instead of buying cars for the decline in sales.

"The automobile and components industry has been affected by BS6 (emission norms) and the mindsets of millennial, who now prefer to have Ola and Uber rather than committing to buy an automobile," she said in Chennai on Tuesday.

This has set the cat among the pigeons as the industry saw in the statement an excuse for not slashing excise duties to prop up sales -something the government has been hinting at for a week at least.

 

For one, sales to all cab companies account for between 8-10 per cent of overall passenger vehicle sales across companies. Sales to the entire taxi segment at Maruti, India's largest carmaker, are between 5-6 per cent and it has not changed in the last one year, implying that sales to cab aggregators have fallen in proportion to the decline in overall car sales. At Hyundai, it is at 3 per cent.

In this fiscal year so far, passenger vehicle sales have declined by almost a quarter from a year ago. Sales have declined for 10 straight months so far and in 13 of the last 14 months. The industry has been clamoring for a 10 per cent GST cut to tide over the crisis. But a number of states opposed a cut and with little elbow room for the Centre as well on fiscal mathematics, Ola, Uber and the quirky millennial present a good excuse.

THE CATCH

Prima facie, the number of cabs and radio taxis on the road has gone up. Ola for example had 850,000 cars on the road and another 50,000 in the lease model. The numbers have gone up to 15,00,000 and 100,000, respectively. That is an addition of around 800,000 units. Yet, this does not mean all these are new cars -- a substantial number of Ola and Uber vehicles are pre-owned and are often registered on both the platforms. Hence, they may not be displacing a private car that a millennial would have otherwise bought.

 

WHAT CAR FIRMS SAY

"The jury is still out on this. We cannot say anything conclusively," says Shashank Srivastava, head of sales and marketing at Maruti Suzuki India. "The status symbol is still very much there with a new car purchase. Shared mobility maybe having some impact in bigger cities but the broader effects need to be studied further."

Mahindra and Mahindra managing director, Pawan Goenka, also said the impact has not been very significant so far. "But it may become big in future." he added.

FALLING NUMBERS

What is even more interesting is that the slowdown has impacted the business of Ola and Uber this year as well. The aggregators' growth in daily ridership has come down substantially from over 80 per cent in 2016 to just 4.5 per cent in 2019. The two companies cumulatively undertake about 3.65 million trips everyday today against 3.5 million trips in 2018.

 

PERSONAL CAR VS CABS ON APPS

Even car ownership economics does not favour the cab aggregators vs owned car argument. On a unit cost metric basis from an economic standpoint, using shared mobility over owning a car on a regular basis makes sense only for shorter trips of less than 40 km or upto 1,000 km in a month.

Taking in account the cost of maintenance, ownership, mileage and the salary of the driver, a 20 kilometer trip every day would cost Rs 740 in a personal car against Rs 540 in a cab.

The monthly bill for the same trip in a cab will be Rs 13,500 against an expense of Rs 18,160 in a personal car. In the event of a 25 per cent surge in price of the trip for a cab, which is not very uncommon during peak hours, the cab bill escalates to Rs 16,875. Beyond trips of 40 km, however, owning a car makes all the sense. Somebody who travels long distance of 100 km every day or 2,500 km every month would run up a cab bill of Rs 44,000 (Rs 55,000 in surge pricing) against Rs 26,802 in a personal vehicle.

OLD TACTICS?

This isn't the first time though that the government has used Ola and Uber as a shield to protect itself from sticky topics. In February this year, while countering a leaked National Sample Survey Office (NSSO) report that highlighted India's unemployment rate had hit a 45-year high, Niti Aayog CEO Amitabh Kant had countered it saying Ola and Uber alone had created about 2.2 million jobs. When the NSSO report was finally released in May, it only corroborated the earlier leaked report.

The claim of cab aggregators creating 2.2 million jobs remains unsubstantiated till date. Just like the cab aggregators causing a slowdown in the automobile industry in the country.

Sitharaman is not alone in her belief though. At the annual Society of Indian Automobile Manufacturers conclave last week, one of India's top private sector bankers, Uday Kotak, also said cars have lost their status symbol and owning them is no longer attractive to the youth.

"A car was a status symbol when I started my career. But my son is more comfortable with Ola and Uber which is a classic example of capacity utilisation," he said.

[AndhraneedSCS]

Car unte, weekend Ola/Uber lo pani chesi dabbulu sampadinchavachu ...

[Kool_SRG]

6 minutes ago, AndhraneedSCS said:

Car unte, weekend Ola/Uber lo pani chesi dabbulu sampadinchavachu ...

Ola , Uber introduce chesina starting lo chala mandi their free cars ni lease ki tipparu mundu koncham baane vachevi ippudu not like that... Mundu with in few minutes cab dorikevi ippudu not like that asked multiple guys who ply these cabs many cab drivers are cutting down the trips with Ola/Uber..

[Paidithalli]

[hyperbole]

If there is a slowdown in the purchase of  underwear  that means millennials are not wearing underwear..😂😂 

 

[hyperbole]

If there is a slow down in textiles then Millennials are wearing short clothes ..😂

[hyperbole]

Netflix is responsible for rise in unemployment in India