BANGALORE: An Ola taxi ride will now be cheaper than one in an autorickshaw. Olacabs has slashed fares for point-to-point travel in Bangalore by a fourth -a move that may force rivals to follow suit.

The fare for Ola Mini (hatchbacks Ford Figo and Nissan Micra) has been cut from Rs 13 per km to Rs 10, and that for Ola sedan from Rs 16 per km to Rs 13. There are no additional charges.

The prescribed autorickshaw fare is Rs 13 a km.Meru charges Rs 19.50 a km, and Easy Cabs Rs 20. We are the cheapest mode of transport in Bangalore.Economies of scale and operational efficiencies have resulted in a price cut and we are passing on the benefit to the end user," said Pranay Jivrajka, VPoperations in Ola.

Ola has reduced the waiting time for customers to less than 10 minutes from 25-30 minutes about two years ago, thanks to improved technology and a bigger fleet.

Jivrajka said the lack of an efficient transport network in the city has created a taxi economy catering to a few thousand customers every day. "Autos are regulated by law, but they are not enforced and hence autos sometimes charge extra," he said.

Olacabs, founded in 2011 by IIT Bombay alumni Bhavish Aggarwal and Ankit Bhati, has a network of 15,000 cabs across the country offering point-to-point and rental booking services. It operates 4,000 cabs in Bangalore, with bookings showing a 30% month-onmonth increase.

Ola's fare cut comes close on the heels of premium cab service Uber's decision to offer a 25% discount on its fares. Uber has not reduced the fare per km; instead its bills will reflect a reduction at the end of the ride.

Siddharth Pawah, CEO of Meru Cabs, said the company does not believe in fare wars. "Competitors who indulge in fare wars don't have enough customers, and slashing prices is seen as a customer acquisition strategy . This is counterproductive to drivers and the economics doesn't benefit their community . When fuel prices are going up and the drivers have to pay an EMI, an additional fare cut is unfair to drivers," he said.

Rajiv Vij, MD of Carzonrent that operates Easy Cabs, said: "Price wars are a desperate move on the part of some operators to acquire customers. We offer discounts and reward our frequent customers with travel miles. I think customers are looking for a reliable service."

