Over Half of the Millennials in India Don’t Use Taxi Apps: Study

Usage of cab aggregators like Ola and Uber remains low even in the top 8 cities of the country, the survey found.

App-based taxi aggregators still have a long way to go before they capture their potential users and replace the idea of owning a car. A recent survey by Morgan Stanley has found that more than half of the millennials in India have never used an app-based cab service like Ola and Uber.

The usage of such taxi services remains low even in the Tier-1 or top 8 cities of the country. Nearly half of the millennials surveyed in Tier-I cities have never used an app-based cab service, while around one-fifth use it at least once a month, Morgan Stanley’s AlphaWise survey showed.

The report had surveyed millennials, aged 18-35 years, earning at least Rs 1.8 lakh ($2,800) a year and who are active smartphone and internet users.

App-based taxi services are expected to dissuade people from owning cars. However, the survey shows that only 3 percent of millennials have given up their cars for aggregator taxi services.

Millennials aspire to purchase their own cars and app-based taxi service providers have mostly replaced the public transport option, the report said. A little over one-third of the respondents have shifted from travelling in a bus or a local train to a cab.

We find that such services do not threaten passenger vehicle ownership. 

Morgan Stanley Report

Over half of the respondents also said that they would like to always own at least one car.

But Which Car?

Morgan Stanley found that the millennials who are first-time buyers tend to go for hatchbacks, while those replacing their vehicles prefer sports utility vehicles (SUVs).

The reason: the survey shows that they choose hatchbacks for fuel efficiency and lower costs, while the preference for SUVs is driven by product quality and low maintenance.

“Our survey indicates that car penetration in India is low,” the report said, adding that it tends to rise as incomes grow. The report expects the number of passenger vehicles sold to grow at a compounded annual rate of 11 percent for the next eight years.