These tablets will be fixed behind the front seat facing the rider and is a way of monetising and creating additional revenue streams by showing ads to users.
“A lot of critical engineering work for this pilot is being done by the Indian engineering team and it is a global product,” said a source aware of the matter, adding that the tablets will first be installed in cabs in the United States before being brought into markets like India.
The company can show third-party ads and also cross-sell other services like Uber Eats.
“You can sell food coupons for the airport food court if you are on the way to the airport,” said the source.
An Uber spokesperson confirmed the development but did not share further details as the project is at an early stage. Competitor Lyft said in August that it would set up a media division to monetise users through in-car ads.
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Tech companies across sectors are increasingly focussing on advertisement revenues to improve unit economics. Ecommerce behemoth Amazon, for example, generated more than $30 billion in 2021 from ads alone.
The Uber pilot comes after its increased focus to tap into India’s engineering talent for global needs amid reports about a potential sale or merger with Indian rival Ola.
Both the companies have previously denied these reports.
Andrew Macdonald, head of global mobility, told ET on September 21 that Uber was debuting and testing a lot of innovations in the country. It already has around 2,000 employees in India and plans to add 500 more.
Uber had also spoken about monetising users through in-car ads at the Investor Day in February. It has hired former Amazon executive Mark Grether to lead the company’s $1 billion advertising efforts.
Grether told investors that the company sees three avenues to place ads – in-app, in-car, and outside the car – on the roof.
Installing the tablet also encourages more stickiness among drivers to use Uber’s app, rather than switch between rival apps, as some of the proceeds from the ad revenue can be passed on to the driver, a source said.
“Uber needs to get the product out fast because it is like a race with Lyft on who can fit the tabs first in the car. If Lyft fixes a tab first it will be complicated for Uber to ask the driver to install Uber’s tab,” said the source quoted earlier in the story.
Challenges
This is not the first time that ride-hailing companies have tried to fix tabs in cars.
Rival Ola also had a service called Ola Play, which had music and other value-added services. Ola Play cabs were listed separately on the Ola app and had a higher fare.
It is no longer displayed on the app and sources said Ola Play had been shut down.
Ola declined to comment on ET’s queries.
South-East Asia’s Grab also installed tablets inside cars in 2018.
A source aware of Ola’s Play’s working said that attaching a tab to the cab was Ola’s way to lure premium customers who at the time were moving towards Uber.
Drivers were also keen on having these tabs installed as it attracted higher fares, and hence for Ola, a higher commission, which they charged as a percentage of total fares.
The source added that the project was initially promising, and even gave founder Bhavish Aggarwal the confidence to focus more on hardware projects like electric vehicles.
The company soon started facing multiple challenges in India. The advertisement model was difficult as the cost-per-click and cost-per-view remain low in India.
“Maintaining the hardware also became difficult as the wear and tear due to India’s bumpy roads took a toll,” said the source quoted above. “Getting the military-grade hardware made it too expensive for the driver and the company to purchase.”
Meanwhile, Uber in India has been increasingly focussing on going deeper into low-ticket size products. It said that the three-wheeler and bike categories are driving growth in the Indian market. It has also started piloting public bus services in Gurugram and Bengaluru and is bullish on the category.
