Bengaluru-based auto and cab ride-hailing firm Namma Yatri is in the early stages of exploring expansion into the US market in collaboration with multiple unions, sources aware of the developments told Moneycontrol.
“The firm is in talks to expand into the US markets. They want to do it in collaboration with unions to help them get that edge over Uber or Lyft in the region,” a person familiar with the matter told Moneycontrol requesting anonymity.
While the firm is in talks with unions in the US, the current focus will remain in expanding within India. Namma Yatri is now operational in Karnataka (Bengaluru, Mysuru, Tumakuru), Kerala (Kochi), West Bengal (Kolkata, Asansol-Durgapur, Siliguri), Telangana (Hyderabad), Tamil Nadu (Chennai) and Delhi.
Namma Yatri declined to comment on Moneycontrol's queries.
SoftBank-backed Juspay which spun off Namma Yatri into a separate business in April will also continue to power payments for the company’s US foray.
Juspay recently secured a Payment Aggregator (PA) license from the Reserve Bank of India (RBI) and said that it plan to enter international markets including the US, SouthEast Asia and West Asia.
Biju Mathew, co-founder of the New York Taxi Workers Alliance (NYTWA), which was founded in 1998 and has more than 25,000 drivers as members, told Moneycontrol,“US cab market is dominated by Uber and Lyft. The condition of drivers in the US is no different from that in India. Two years ago, a player named VIA also entered the market”.
Mathew said that while new there is space for new entrants the question is on survival in the market.
“It’s a free market, and anyone with a better product can enter, but the question is whether they can sustain it because the taxi industry is a very low-margin business. Companies cannot expand into a new market without reducing fares, and if the fares get lower, then the driver does not make any money. Companies, which enter with enormous capital outlay to a market also have to promise a rate of return to the investors” he said.
“In India, there were only two apps (Uber and Ola) that were hegemonic and established control over the market, but in the last two years, four- five new apps, including Namma Yatri, have entered the market, and a similar thing will happen in the US market as well,” Mathew added.
Namma Yatri’s entry into newer markets comes just a month after the firm raised $11 million in its pre-series A funding round. The round was led by Blume Ventures and Antler with participation from Google and several other investors.
Moneycontrol was the first to report on April 18 that Namma Yatri was in talks with Blume Ventures, Antler and Google.
"There is a lot of pressure for firms like Uber in the US market. Drivers are looking for apps that can offer better pay and consumers are looking for cheaper rides. I think Namma Yatri wants to tap into this opportunity," a source said requesting Anonymity.
Namma Yatri will compete with the likes of Uber, Didi, Grab and Lyft in the US.
Eyeing the US Market
An industry source said that Namma Yatri’s entry especially in collaboration with unions will give them an edge and take off because there is some unrest among drivers and consumers.
According to international news agency, NBC News, several delivery and ride-hailing app drivers staged a work stoppage in February to bring attention to what they say are low wages and dangerous working conditions.
Namma Yatri’s journey
In April 2020, SoftBank-backed Juspay spun off the mobility business into a separate firm called Moving Tech. Shan M S and Magizhan Selvan, who were part of JusPay, are currently leading the spun-off mobility business.
Fintech firm Juspay, in collaboration with Nandan Nilekani's BECKN Foundation and supported by Bengaluru's Auto Rickshaw Drivers' Union (ARDU), launched the Namma Yatri app in November 2022. The app promises to be an alternative to Ola and Uber, which charge 30-40 percent commission.
According to the firm’s website, the driver’s earnings across the country so far total Rs 805 crore, and it has also completed 5.17 crore trips through its platform.
The ride-hailing market is presently dominated by players like Ola and Uber. Rapido is also seeing increasing market share. However, Namma Yatri’s subscription model has been in the spotlight.
In November 2022, Namma Yatri introduced the direct-payment model in Bengaluru, becoming the pioneer in this approach. Subsequently, other ride-hailing giants like Ola, Uber, and Rapido have expressed interest in adopting this model to circumvent GST charges on their services.
Originally launched as the Yatri app, Namma Yatri debuted in Bengaluru, Mysuru, Tumkur, and Kochi. In Kolkata, it was introduced as Yatri Saathi. Recently, the company expanded its services to Chennai, where it even facilitates 'metro-ticket' bookings through its platform.
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