The online cab aggregator industry in India had witnessed tremendous growth since 2013. This was not only in terms of customer growth, but venture capitalists had also shown confidence in the industry by making investments of billions of dollars across a few companies including start-up firms, which might take a longer time to pay back the amount. What differentiated these cab aggregators from radio taxi operators was that there was no need for them to hold inventory and they had to face fewer legal hurdles as they neither owned the vehicles nor did they have any drivers on their payroll. The online cab aggregator industry operated on a pay-for-performance business model, where the cab drivers were paid for the pick-up and drop services of the cab aggregator companies. These aggregator companies connected the demand side, i.e. .
PayPal (9 USD)
The case is structured to achieve the following teaching objectives:
To understand the business model options available to a marketplace player in the online cab aggregator industry
To explore how a firm can create and capture customer value propositions in a marketplace business model
To understand the importance of economies of scale and economies of scope for a marketplace player.