These tablets will be attached behind the front seat facing the driver and are a way to monetize and create additional revenue streams by serving advertisements to users.
“A lot of critical engineering work for this pilot is being done by the Indian engineering team and this is a global product,” a source familiar with the matter said, adding that the tablets will be first installed in taxis in the United States before being introduced in markets such as India.
The company may display third-party advertisements and also sell other services like Uber eats.
“You can sell food stamps for the airport food court if you’re on your way to the airport,” the source said.
An Uber spokesperson confirmed the development but did not provide further details as the project is in its early stages. Competitor Lyft announced in August that it would create a media division to monetize users through in-app ads.
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Tech companies across industries are increasingly focusing on ad revenue to improve unit economics. E-commerce giant Amazon, for example, generated more than $30 billion in 2021 from ads alone.
Uber’s pilot comes after its increased focus on India’s engineering talent for global needs amid reports of a potential sale or merger with Indian rival Ola.
Both companies have previously denied the reports.
Andrew Macdonald, head of global mobility, told ET on September 21 that Uber was debuting and testing many innovations in the country. It already has about 2,000 employees in India and plans to add another 500.
Uber also talked about monetizing users through in-vehicle ads during Investor Day in February. He hired former Amazon executive Mark Grether to lead the company’s $1 billion advertising efforts.
Grether told investors that the company is considering three options for placing ads – in the app, in the car and outside the car – on the roof.
Installing the tablet also encourages more drivers to stick with using Uber’s app, rather than switching between competing apps, as some of the ad revenue proceeds can be passed on to the driver, a source said. .
“Uber needs to get the product out quickly because it’s like a race with Lyft to see who can install tabs in the car first. If Lyft fixes a tab first, it will be complicated for Uber to ask the driver to install Uber’s tab,” the source quoted earlier in the story said.
This isn’t the first time ride-sharing companies have attempted to fix tabs in cars.
Rival Ola also had a service called Ola Play, which offered music and other value-added services. Ola Play taxis 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 has been shut down.
Ola declined to comment on ET’s questions.
Grab in Southeast Asia also installed tablets inside cars in 2018.
A source familiar with Ola’s Play’s work said that tying a tab to the taxi was Ola’s way of attracting premium customers who at the time were heading to Uber.
Drivers were also keen to install these tabs because they attracted higher fares, and therefore 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 such as electric vehicles.
The company soon started facing multiple challenges in India. The advertising model was challenging as cost per click and cost per view remained low in India.
“Hardware maintenance has also become difficult as wear and tear from India’s bumpy roads have taken their toll,” the source quoted above said. “Getting military-grade gear made it too expensive for the driver and the company to buy.”
Meanwhile, Uber in India is increasingly focusing on deepening low-cost products. He said the three-wheeler and bicycle categories are driving the growth of the Indian market. He has also started piloting public bus services in Gurugram and Bengaluru and is bullish on the category.