Pre Paid Taxis v/s Self Owned Cars

The Speculation Anand Mahindra, Chairman & MD of Mahindra & Mahindra addressed audience at launch of its compact sports utility vehicle TUV 300Mahindra & Mahindra He warned auto industry against rising competition from taxi-hailing companies Concern that apps such as Uber & Ola, could push people into giving up on ownership of cars Threat to auto industry volumes may arise Increasing number of people might want access to transportation & not own object of transportation

How can auto companies respond to the speculation React proactively so that it does not impact their operations Upgrade auto models with technology to attract young crowd New vehicle models will have to get more appealing than the past Leverage the opportunity to supplying to pre paid taxi companies

Initiatives by Auto companies to beat pre paid taxi competition Car makers are now increasingly using cutting edge technology to offer multimedia systems that connect mobile phones to cars Technology wherein one can talk on the move, use voice recognition system to make calls & change radio stations without loosing control of the steering wheel are being introduced in cars Some of these features found in luxury cars are now making their way into the mass market segment too Ford recently started a car sharing initiative in the US that helps people let out their cars to select set of customers to reduce cost of maintaining vehicle

Advantages of Prepaid taxi over self owned vehicles Pre paid taxisSelf Owned Vehicles Overall Cost of Vehicle No capital cost or auto cost incurred by user of car Huge initial cost of autos, car loans applied for purchasing autos may be difficult & lengthy to obtain Cost of maintenanceNo maintenance cost, cost borne by prepaid car companies Huge maintenance cost for servicing the vehicle, PUC charges, any repair cost due to wear & tear too may be incurred ConvenienceAvailable to use when desired, No parking problem, easy to use mobile apps for booking, extremely short waiting period May be unavailable due to another family member using the vehicle, parking is always a crucial problem especially in crowded cities TechnologyUsually technologically advanced & updated. E.g., Some prepaid taxis even offer Wi-Fi services Mostly looked upon as an utility vehicle hence no much attention to technology may be given No Additional CostNo additional costs like Insurance, cleaning costs, parking charges etc. Insurance, parking charges & other petty charges have to be borne by user OffersPre paid taxi companies have exciting offers from time to time to save cost Costs remain standard & constant

Conclusion Choosing a pre paid taxi has many advantages Convenience is the major factor why people choose pre paid taxis An Increase in the use of prepaid taxis does not mean people are going to necessarily stop buying cars Even though cost is a major factor, it is not the only one in consideration while one thinks of owning a car Reason for buying cars can be mainly related to status among other factors With competition from Pre paid car companies, we can expect car manufacturing companies to produce better cars with updated technology even in the mass market segment Car manufacturers should accept competition & work towards improving their products & thus increasing their sales volumes

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