Uber, Ola Get Support From India Inc

"My view is that it is a great business model. I think it's truly innovative. There is a new type of industry that is going to come up which is going to squeeze off (the traditional ones)," N Chandrasekaran, who heads the country's largest software firm TCS, said at an event last week here.

Pharma entrepreneur-turned-billionaire investor Ajay Piramal has hailed Uber's ability to utilise an asset to the fullest as its biggest strength. Citing the economic benefit of using such taxi-hailing apps, he said running costs can come down by as much as 95 percent if he opts for the services of Uber or Ola.

"I think it's really utilising the unutilised capacity in the system. So, in some ways, you are making the whole world much more productive," Piramal said, adding this model is a win-win for all stakeholders.

Customers get unparallel service at lower costs, the driver gets paid more than what he would otherwise have if he was driving a taxi and the system benefits by utilisation of an asset to the fullest, he added.

The support to Uber from India Inc comes days after auto major Mahindra & Mahindra chairman Anand Mahindra expressed fears of the model publicly, saying it could affect sales for the auto industry.

"The age of access being offered by taxi-hailing apps like Uber and Ola is the biggest potential threat to the auto industry. Since these app operators have made transpiration a commodity, auto sales could be hit and volumes get impacted," Mahindra had said earlier this month in Pune.

"A lot of youngsters who can own vehicles today don't want to own one today; now they need only access to means of transportation," he said. Uber has also been very controversial in different pockets of the world, with allegations of operating as an unregulated entity.

Back here, the US-based taxi-hailing app has faced ire after a Uber driver allegedly raped a female passenger, and the Reserve Bank hauling it up for circumventing the payments regulations.

And, last week the Delhi administration formally denied it a licence to operate in the city.

While delivering the CK Prahalad memorial lecture here on Friday last, RBI Governor Raghuram Rajan said, "We got a lot of bad press for one thing we did. One entity was violating forex rules, and we said you can't do that. If you don't like what the rules are, petition us to change the rules, but don't violate the rules.

"And this is a company that has been hauled up for violating rules elsewhere in the world. We get a bad name here enforcing the rules."

In the past, ace banker Uday Kotak had also come up in support of Uber-like business model and tweeted about the surge in valuations and network of the firm in a single year.

In early 2014, Uber was serving 66 cities in 29 countries and was valued at USD 3.5 billion, which jumped to 266 cities in 53 countries and a valuation of USD 40 billion within a year, he had said.

Piramal pointed out to the valuations, saying all such disruptive companies have seen huge jump in their valuations in quick time. He cited the case of budget hospitality company Airbnb, which has seen a huge surge in valuations.