Uber and Ola are coming up with new services, targeting value-conscious consumers. Uber is looking to invest in low cost riding options such as bike taxis, car pooling and auto rickshaws.

Earlier, Ola launched cheapest Ola Micro,describing it as cheapest taxi-hailing service. Ola chief operating officer Pranay Jivrajka said, "(It) will be the most pocket friendly mode of intra-city cab travel." In a bid to attract customers, Ola's Micro service is offering air conditioned cab rides at Rs 6 per kilometre.

These companies are facing regulatory pressure on surge pricing, particularly during peak hours. Earlier, the Karnataka state government said that fare and other charges cant be higher than the Government fixed rates, even during peak time.

Also read: Book your cab ride using Google Maps application

According to experts, demand for taxis is coming down. Transportation consulting firm, Valoriser Consultants founder Jaspal Singh said, "In order to tap customers who use public transport, there is a need to give economical and faster option for shorter distances."

Uber India VP Amit Jain said, "We want to make transportation available for everyone and cabs may not always be the most affordable option for all segments."

Jain said, "Uber, which launched a bike taxi service in March, is now assessing how two-wheelers can be the right answer for short-distance trips particularly those that help provide last mile connectivity."

- Sumana