Latest news with #BennKochuveedan
New Indian Express
20-07-2025
- Automotive
- New Indian Express
'We are open to all pricing models'
Ride-hailing Uber, which is facing heat from Rapido with its driver-friendly monthly platform fee model, says it's open to any model that helps drivers who number 1.4 million now. The San Francisco-based rider app entered the country in 2012 with just one product in one city and today boasts of close to a dozen offerings across 125 cities, most of which are locally developed and unique to this market. Uber India president Prabhjeet Singh tells Benn Kochuveedan that it grew a whopping 40% in terms of driver additions from 1 million in 2023 to 1.4 million in 2024. Your rival Rapido with its monthly platform model as against your 30% commission model from each ride is drawing a lot of attention forcing Ola to follow suit. What is your approach to this pricing model and what will be the impact on your revenue if switched to this one? We are open to all pricing models that help our driver partners. In fact, we are testing a model that's based on a monthly fee model in some cities. All our services are based on the feedback from customers and our driver partners. That we've added 0.4 million new driver partners in 2024—from 1 million in the previous year to 1.4 million—is a testimony to the success of our business model. The way we operate is not necessarily about what others do. What we care for is our partners' profitability and choices. This is a competitive market and we are continuously innovating--whether it's our features, or the way we work with drivers. We offer different operating models to our partners. For example, our auto business runs on a subscription model, we also offer different models in some cities for cabs. There is no one uniform answer, that's the power of a very diverse business and you literally can actually customize according to market demands. What we want to make sure is that irrespective of the way drivers engage with our platform, their earnings should be fair, stable, and transparent. Yes, multiple pricing models are in the market and we'll continue to iterate with drivers to ensure that they have choices. That 4 lakh new drivers came onto our platform last year alone means drivers are choosing to work with us despite having the choice of working with multiple platforms. You've nearly a dozen products here. How many of them are profitable? A very large percentage of our products are profitable. We don't report product-level profitability but at the end of the day the fact that we are growing rapidly means we are running a profitable business. We make enough money to reinvest in other new products. Our disciplined operations allow us to reinvest in categories which are future markets, so it's a portfolio of products that we manage. India business is growing strong, we continue to have a very sustainable business, and we're reinvesting profits from one part of the business to other parts. As a policy we don't publish specific revenue numbers. How is Uber Green doing? What's preventing its faster adoption? As the largest ride-hailing platform we must lead the industry by being a catalyst. For more EVs to come to our platform, I think OEMs have to come together, financing has to improve, more fleet partners with EVs have to come forward, and finally consumers have to opt for a green car which is costlier than a normal ride. We launched Uber Green about two years ago and it is now live in five cities, including Mumbai and over 20,000 EVs are on our network now. At the end of the day it comes down to an economic choice for the driver. Pricing is the biggest speed bump I would say. Ride-hailing vehicles tend to run longer, they need a certain range, price points need to be lower, there must be the right charging infrastructure. So we are trying to solve for it by working with fleet partners, recognising that they will be able to make those investments in creating captive hubs, they are able to purchase those assets but that takes time. Also the resale market for EVs is still to fully play out. Many of your services like Ubermoto, Uber Shuttle don't have licences in many cities? Transport is a concurrent subject and every state has its own rules and regulations. What we're doing is as we innovate and pilot new services we simultaneously work with respective state administrations and educate them on the need to give customers mobility choices.
New Indian Express
09-06-2025
- Business
- New Indian Express
EMIs fall as state-run banks pass on rate-cut bonanza to existing borrowers
The 50 bps repo cut announced on June 6 is the steepest since May 2020 in response to the Covid pandemic when the RBI slashed it by a steeper 75 bps, while the 100 bps CRR is historic.(Representational Image) (Photo | R Satish Babu, EPS) Business EMIs fall as state-run banks pass on rate-cut bonanza to existing borrowers Major PSBs like BoB, PNB, BoI, and Uco Bank have slashed their repo-linked lending rates by 50 bps, leading the rate-cut trend to boost credit growth. Benn Kochuveedan MUMBAI: Many large public sector banks such as Bank of Baroda, Punjab National Bank, Bank of India, and Uco Bank have reduced their repo-linked lending rates by a full 50 bps to their existing borrowers in response to the Reserve Bank's unconventional 50 bps reduction in the repo rate to 5.5% last Friday. Also slashing the cash reserve ratio (CRR) by a steep 100 bps to 3% in a staggered manner between September and end-November which will help them protect their margins which have been under pressure since long due to higher pricing of deposits. The 50 bps repo cut announced on June 6 is the steepest since May 2020 in response to the Covid pandemic when the RBI slashed it by a steeper 75 bps, while the 100 bps CRR is historic. The CRR reduction will release Rs 2.5 trillion in lendable money to banks, which means they can lend 10x more or worth Rs 25 trillion. The CRR will be reduced in four equal instalments of 25 bps each beginning September 1 and ending November 29. This will also protect banks' margins, which Crisil considers to boost their NIMs by 10-15 bps. Leading the rate-reduction bandwagon are major public sector banks such as Bank of Baroda, Punjab National Bank, Bank of India, and Uco Bank which have reduced their repo-linked lending rates (RLLR) by a full 50 bps. This means that existing home and auto loan borrowers would see their EMIs fall considerably or their loan tenor coming down. Typically for a Rs 50 lakh loan, a 25 bps reduction in interest rate means, EMI coming down by a month. In the present case, it means the loan tenor is down by two EMIs. Bank of Baroda has cut its RLLR from 8.65% to 8.15% effective June 7, while PNB's rate will be down from 8.85% to 8.35%, starting June 9, and Bank of India has lowered the rates from 8.85% to 8.35% effective June 6 itself. Uco Bank has reduced its RLLR from 8.80% to 8.30% and has also cut its MCLR by 10 bps across all tenors. However, the private sector peers who are more cautious of their margins are taking a more calculated approach, following suit with marginal reduction (10-20 bps) in MCLR rates. This is permissible as the RBI mandates banks to lower the repo cut only from the first day of the next month and not immediately. Among the private lenders, HDFC Bank has cut its MCLR across tenures by 10 bps, effective June 7; Karur Vysya Bank has cut MCLR by 10-20 bps. But ICICI Bank and Axis Bank are yet to offer any reductions. Industry leaders SBI and HDFC Bank have home loan rates as low as 8% now and if they pass on the entire benefit to existing customers their rates will be 7.5% for loans above Rs 50 lakhs and under 8.5% for lower loan amounts. For the system, the rate cut move by the central bank means, better rate transmission. System-wide only almost 45% of loans are repo-linked but all new retail loans have to repo-inked. Repo linked loans came into force in October 2019. RLLR is the rate at which banks lend to customers whose loans are directly linked to the repo rate, while the marginal cost of funds based lending rate (MCLR) is the minimum interest rate that a bank can offer on loans, determined by factors such as the bank's cost of funds, operating expenses, and required margins, and typically responds more slowly to policy rate changes than repo-linked rates. While the move is favourable for existing borrowers, it has implications for depositors as banks are expected to cut pricing of fixed deposits and other term instruments, in line with falling lending rates and increased liquidity. Motilal Oswal estimates 30-70 bps in fixed deposit returns across tenures sooner than later. While repo-linked loans respond instantly to monetary policy changes, deposit rates tend to adjust more slowly due to regulatory norms and competitive market pressures. As a result, lenders may face margin pressure, the firm noted in its report, over the next two quarters until deposit repricing aligns with the new rate environment. The 100-bps phased reduction in the CRR will inject Rs 2.5 trillion into the banking system, with which they can make incremental lending of 10 times more—or worth Rs 25 trillion. Crisil sees the NIM compression which was seen at 10-20 bps earlier due to the past two repo reduction of 25 bps each in February and April, now coming down to 5-15 bps only. 'The CRR cut will support NIMs in two ways. One is the direct addition to income from the flexibility to deploy the funds till now parked as the CRR into the business. Two, more systemic liquidity after the CRR cut and the RBI's other measures will ease pressure on the cost of deposits, offsetting the downward pressure on NIMs,' Ajit Velonie, a senior director with Crisil said. 'The frontloading of the repo rate cut will have had a somewhat higher impact on the yield side of NIMs than previously expected. This is because 45% of the overall loan assets are linked to an repo-linked now. Typically, these are repriced rapidly after rate cuts. On the other hand, the MCLR -linked loans are re-priced at a relatively slower pace and by a lower extent than the external benchmark-linked loan rate. The frontloading thus accentuates the impact on loan yields,' Velonie said. According to Subha Sri Narayanan, a director with Crisil, 'the direct impact on NIMs will be from the flexibility to deploy the Rs 2.5 trillion of liquidity released from the CRR cut into interest-bearing assets. Given the planned staggered implementation, in the current fiscal, this should benefit NIMs by 3-4 bps, while on a full-year basis, there would be a 7 bps benefit. Secondly, the additional liquidity available for lending will ease the pressure on deposit growth that, in turn, increases the flexibility banks have to cut their deposit rates. Overall, we expect the compression in bank NIMs to be 5-15 bps this fiscal, compared with 10-20 bps estimated earlier.'
