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Uber, Ola battle it out in India with…bikes

A taxi app war is heating up in India and Ola, the country's biggest player, and rival Uber have both launched new services to win over customers: Motorbikes on-demand.

On Thursday, Indian start-up Ola launched its "Bike Taxis" service allowing users to hail a motorbike within the smartphone app. And U.S. rival Uber, which has been stepping up its presence in India, announced "uberMOTO" as well, which works in the same way.

Both companies are trialing the effort in Bangalore, seen as one of India's biggest hubs for technology.

"We are talking about a country with so much congestion and bikes are available widely and it's the easiest way to zip through traffic," Anand Subramanian, senior director of marketing communications at Ola, told CNBC by phone.

"We think there is immense potential given the low operating cost of bikes and there is little supply constraint compared to what we face in the cab segment."

Ola

In a statement, Uber echoed the same sentiment, saying its service would "help people save time and money while helping cut congestion".

Price war

The two are battling it out over prices too. UberMOTO will cost a 15 rupee ($0.22) base fare plus 3 rupees per kilometer or 1 rupee per minute. Ola is charging 2 rupees per kilometer or 1 rupee per minute with a minimum fare of 30 rupees.

Uber

Drivers for both Ola and Uber will have to provide their passengers with helmets by law.

The addition of motorcycles to both apps marks the latest clash between Ola – which is now valued at around $5 billion – and Uber which is worth over $62 billion. Last year, the U.S. ride hailing app pledged to pour $1 billion into expansion in India and has received funding from Indian business giant Tata. After that investment, it said it expected to hit "over a million trips a day in the next six to nine months".

Ola has been looking to leverage its local knowledge, introducing services tailored to the Indian market. The Indian start-up was the first to offer cash payments for its rides which Uber followed. Ola also offers cheap rickshaws on its platform and has bigger access at the moment to smaller cities.

Subramanian said the start-up is looking to "scale this up over the coming weeks to a larger audience in Bangalore" before looking towards other India cities. But he did not specify what those would be.

Bikes for deliveries?

Both Uber and Ola have been experimenting with services beyond passenger rides. In the U.S., Uber has trialed delivery offood to flu jabs. And in India, Ola is trying out a similar service called Ola Café.

Subramanian did not say whether the bikes would play a part in the logistics trials being carried out by Ola.

"We have done multiple experiments in the past, Ola Store and Ola Café, these are two experiments are currently on. We will from time to time take experiments like these to be able to understand how we can innovate further but the focus is on mobility for a billion people," Subramanian told CNBC.