When internet startups first opened for business in India, they seemed like the most lucrative industry to work for. Such was the craze that several educated individuals rebooted their careers to become drivers for Ola and Uber, lured by the prospect of making more money. But lately, things have taken a turn for the worse.
All this mess stems from the fact that the sharing economy’s model in India was copied and pasted from the West—a drastically different market.
“Over time, people in the US and UK invested in extra assets (houses or cars) that were lying unused. That’s the reason why ideas like Airbnb or Uber worked,” said Sanchit Vir Gogia, chief analyst at Greyhound Research. “In India, we never had the assets and we are breaking our backs to create them—and how far that is sustainable is going to be a huge question mark.”
Once the apps were up-and-running, some of these companies likely misjudged their own cash burn. For instance, the likes of Swiggy, Zomato, or OYO, had the tech rollouts in place but later realised that “local processes on-ground were so broken that investments had to be made for localisation and service standardisation,” Gogia said.
Sanchit Vir Gogia: Sanchit is the Chief Analyst, Founder & CEO of Greyhound Research, an award-winning global research & advisory firm. To read more about him, click here.
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