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Car ownership is a trap that can be prevented: Uber CEO Dara Khosrowshahi

"For the newer generation, the dream is not to own a car but the freedom to have any kind of service on demand," Khosrowshahi said

Uber Inc. chief executive Dara Khosrowshahi on Tuesday dived into the raging debate in India on whether millennials prefer purchasing cars over other options such as electronic gadgets.

Khosrowshahi urged Indians to resist falling into the trap of owning cars, like their counterparts in the developed world, and instead take on these so-called “established industries” by focusing on innovations to make travel convenient.

He said there is very high car ownership in the developed countries, which is “a trap that can sometimes prevent innovation because you have a central infrastructure that is designed for the last 10 years versus infrastructure that is designed for the next 10-20 years.”

Khosrowshahi comments follow the government’s recent statement that a change in mindset, especially among millennials is affecting car sales in India.

Last month, finance minister Nirmala Sitharaman attributed the fall in car sales, among other factors, to millennials not wanting to commit to monthly instalments for buying cars and instead preferring to take app-based taxis such as Ola and Uber. She found support from R.C. Bhargava, chairman, Maruti Suzuki India Ltd, who in an interview said many youngsters are preferring gadgets over cars as they can continue using Ola and Uber for their mobility needs which is much more economical.

“For the newer generation, the dream is not to own a car but the freedom to have any kind of service on demand. I think that established protocols and industries are enemies of innovation and India can be a trailblazer by taking on established industries,” Khosrowshahi said.

He was speaking to reporters during an event to announce Uber’s tie-up with Delhi Metro Rail Corporation (DMRC) to provide last mile transportation services.

His comments come in the backdrop of India becoming a key focus region for the ride-hailing platform, especially in the aftermath of losing the battle in China to local rival Didi Chuxing.

India is one of Uber’s largest markets globally, and Khasrowshahi said the San Francisco-based company has committed to continue its investments in the country for the next 5-10 years.

India’s automobile sector is the middle of its worst slump in about two decades amid a slowdown in the economy, led by sluggish demand and slowing private investment.

“The opportunity here in India is that India doesn’t need to be trapped by this establishment. India can actually be an innovator at mass for the developing countries in the world and can be a trailblazer and today we can look back at a day when innovation was accelerated,” Khosrowshahi said.

Uber on Tuesday launched a commuter service, Uber Transit, at select Metro stations in Delhi, making it the first city in Asia for the service. The firm already runs the service in eight cities globally.

Under the public transport feature, riders will be able to see the fastest and cheapest routes to the Metro station, real-time schedules as well as departure time for public transportation, including Metros and buses. Walking directions, to and from nearby Metro stations and bus stops, can also be viewed, Uber said in a statement.

The service will be expanded to 210 Metro stations in a phased manner.

Uber did not disclose investment and commercial details of the partnership with DMRC.

DMRC managing director Mangu Singh said Uber’s service has started at four stations. “We are open to all service providers. Whoever wants to provide a service to our passengers, we are ready to help them,” Singh said.

Pradeep Parameswaran, president for Uber’s India and South Asia operations, said recent amendments in the Motor Vehicles Act will help the company focus on innovations and scale, rather than facing regulatory uncertainty.

The Motor Vehicles (Amendment) Act, 2019 recognized aggregators as digital intermediaries or marketplaces, which can be used by passengers to connect with a driver for transportation.

Uber’s global chief product officer, Manik Gupta, said the company has partnered with local transit app provider MoovIt for the data, which will be shown to users on the Uber app. The company will look to expand to other cities if the service receives a positive response from customers, Gupta said in an interview.

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