Bangalore: The prescribed auto rickshaw fare is Rs 13 a km. Meru charges Rs 19.50 a km, and Easy Cabs Rs 20. However in what may see the onset of cab fare war, Ola cabs have reduced their fares substantially an they will now be less than an auto ride. Ola cabs has slashed fares for point-to-point travel in Bangalore by a fourth -a move that may force rivals to follow suit. The fare for Ola Mini (hatchbacks Ford Figo and Nissan Micra) has been cut from Rs 13 per km to Rs 10, and that for Ola sedan from Rs 16 per km to Rs 13. There are no additional charges.

Ola has reduced the waiting time for customers to less than 10 minutes from 25-30 minutes about two years ago, thanks to improved technology and a bigger fleet.

The  lack of an efficient transport network in the city has created a taxi economy catering to a few thousand customers every day. These customers have migrated from autos as they are unreliable and the charges are not regulated properly.

Bhavish Aggarwal and Ankit Bhati, alumni of IIT Mumbai, founded Ola cabs in 2011 have a  network of 15,000 cabs across the country offering point-to-point and rental booking services. It operates 4,000 cabs in Bangalore, with bookings showing a 30% month-on month increase.

Ola’s fare cut comes close on the heels of premium cab service Uber’s decision to offer a 25% discount on its fares. Uber has not reduced the fare per km; instead its bills will reflect a reduction at the end of the ride.

The cab business operates on private cab drivers lending their vehicles to the cab operators, and they have to bear emi’s and fuel charges. This makes a fare war hard on them. Some cab operators, reward loyalty with travel miles, and end of fare growing discounts for repeated use.