Russia-Founded InDrive Is Taking On Uber, Ola With Lower Commissions

A ride-hailing unicorn that traces its origins back to the coldest city in the world is now aiming to make a dent in India, cashing in on drivers that are "fed up" with the high commissions of giants like Uber and Ola.

InDrive, formerly InDriver, was born out of a grassroots movement in Yakutsk, Russia, when citizens protested against local taxi companies that had doubled their rates on New Year’s Eve in 2012, leaving locals stranded in the Siberian winter.

Now, InDrive is present in 47 countries and over 700 cities across the globe. It entered India first in 2019, in middle-sized cities such as Bhopal, Ludhiana, and Jaipur, but pulled the plug once Covid hit.

It has now re-entered India, launching in Delhi, Kolkata, and Mumbai. "We are normally present in emerging markets, and one of the biggest ones is obviously India, which is growing very fast," Roman Ermoshin, director of Asia Pacific at InDrive, told BQ Prime in an interaction.

The two biggest factors that differentiate them from incumbents are that there's no price-setting algorithm and significantly lower commissions, Ermoshin said.

To be clear, InDrive offers users and drivers the ability to fix their own price on the app. It shows a suggested fare in major cities, which can be negotiated. On its website, InDrive claims that rides on its app are 20% cheaper than other services on average.

"There is no algorithm behind InDrive for setting up the price...We believe that people can negotiate and agree with each other. We just give them the technology to find each other. There is a lot of work being done to make that technology better; we've got almost 3,000 people working for us," Ermoshin said.

He said that the response the app got in Delhi and Kolkata was "pretty good because drivers in these big cities are pretty fed up with the high commissions."

"The current players are kind of dominating, and drivers don't really have a choice. They know that they cannot negotiate the price that the app has set."

InDrive, in the first stage of expansion in any city, starts off by charging 0% service fees to drivers to drum up demand. Over time, it starts charging certain fees, but it never exceed 10%. That compares with the 20% fees that Ola and Uber charge.

"This commission is never more than 9.99%, and it's normally the lowest commission in the market if you compare it with the big players. It's like two or three times cheaper. Drivers are happy to pay that much because everyone understands that service cannot be free. There is quite a lot of work happening behind the scenes, with the support of technology, so there's always a commission," Ermoshin said.