Uber is getting serious about cash payments. The U.S. company, well known for its seamless payment system that requires users to own a credit card, is expanding a cash payments trial that started in India to four new cities in the country as it aims to offer greater choice and reach new customers.
The company’s cash payments test started in Hyderabad in May (it expanded to Nairobi, Kenya, a week later), and now it being extended to cover Ahmedabad, Chandigarh, Jaipur, and Kochi. As I wrote when the original pilot went live, passengers must select cash payments before ordering their ride in order to use the option.
“We know that cash is a dominant payment options for millions in India, especially in small cities,” Bhavik Rathod, general manager of Uber Bangalore, told TechCrunch in an interview. “This [pilot] is part of our investment in India, we’re deeply committed to this country.”
Rathod said the response to cash payments had been “tremendous,” but declined to disclose what portion of rides were paid for via cash. Uber isn’t saying what longer term plans it has for cash payments, but it’s fair to assume that the option will be introduced in many emerging markets where credit card ownership is proportionately lower than the West and Uber’s rivals already offer the payment option. Put simply, it needs to be more flexible if it wants to grow and reach new demographics.
Accepting cash might seem like a piece of cake for Uber, but Rathod explained that it required signification “innovation on the backend” of the company’s platform.
“Drivers and riders have always been carrying cash, so we had to understand their behavior and assess which tech could support this,” he explained. That was done using a combination of Uber’s India-focused team, based in the South Asian country, and its centralized tech team in San Francisco.
Interestingly, while Uber is known for rigidity in requiring customers to use credit cards, it offers a range of options for those based in India. Beyond this cash payments trial, Uber added Paytm’s wallet which lets customers load their account using debit or credit cards, and internet banking too. Regulations from The Reserve Bank Of India (RBI) forced the Paytm introduction, but Uber recently re-added support for direct credit (and debit) card payments using a two-factor authentication system that satisfies RBI’s requirements.
Alongside China, Uber has placed emphasis on its business in India this year. The company hired a president to run Uber India, expanded into seven new cities to take it to 18 overall (India is now its second largest market behind the U.S.), added new safety features and more stringent driver vetting. On top of that, earlier this month it announced plans to invest $50 million in a support center in Hyderabad in partnership with local authorities. It has certainly come a long way since a driver allegedly raped a passenger in New Delhi last December.
India is far from an Uber dominated market, though, and the U.S. firm isn’t the only one making bigs moves in the country’s taxi app space.