Indian ride-hailing startup BluSmart is seeking to challenge Uber and Ola for market share in the country with bets on an all-electric taxi fleet and an aggressive bid to lure disgruntled passengers and drivers from the incumbents.

A clean energy push by Prime Minister Narendra Modi’s government is expected to significantly change India’s transport industry in years ahead, with major implications for ride-hailing firms.

For dominant players Uber and SoftBank-backed Ola, a full shift to electric vehicles (EVs) is likely to be a massive undertaking that would come as both companies struggle with driver retention and customer satisfaction issues.

As a new entrant, BluSmart is looking to seize the moment by beating its combustion engine-powered rivals on electrification, cleanliness and reliability through direct management of its fleet and drivers.

India's ride-hailing market is currently worth USD 13.4 billion - a tenth of China's - and penetration is just 7%, according to Statista, making the country of 1.4 billion a lucrative opportunity.

BluSmart is planning to grow its fleet to 14,000 taxis next year and 100,000 in five years, expanding to four more cities, and offer more immediate bookings, like Uber, according to its CEO Anmol Singh Jaggi.

By June its fleet will include customised, small EVs built by Indian company Gensol Engineering that will allow it to slash fares.