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Uber to give cash a test run in India

The service is rolling out to customers in India's Hyderabad, and will allow them to make payments with cash, rather than a card.

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Uber's car-hailing service now has a cash payment option. Uber

Car-hailing service Uber has added a new method for payment that makes its service feel awfully similar to taxis.

Uber is testing a new cash payment option in the Indian city of Hyderabad, the company announced on Tuesday. The service will roll out over the next week. Uber says the test is the first of its kind across the more than 300 cities worldwide in which it offers its service.

Although Uber has been providing users car rides through its network of drivers since 2009, the company hasn't ever allowed cash payments.

In fact, one of the main selling points for Uber initially was the convenience of paying for a ride from a credit card through its companion mobile app. That stood in stark contrast to many taxi companies, which at the time, were only offering cash payments.

Since then, most taxi companies have transitioned to a credit card payment option by adding card readers inside the car. Uber, however, has always stuck to paying for its rides through its app. The revenue is then shared between Uber and its contracted drivers.

One of the challenges of allowing cash is that Uber may have a less precise sense of the actual fare being paid.

For users, the barriers to paying with cash are not so great. Users simply open their Uber app, hail a car, and select "CASH" as their payment option. Once the ride is over, the customer simply pays with cash. Traditionally, users have hailed a ride through its Uber mobile app and paid with the card on-file in the app.

In a statement to CNET, Uber's Hyderabad general manager Siddharth Shanker said the city has the right makeup to try out cash payments.

Hyderabad, the fourth most populous city in India, is one of the foremost technology hubs in the country. Several prominent technology companies have offices there, including Yahoo.

"Tradition dictates that cash plays a big role for Indian consumers," Shanker said. "As a data-driven technology company that has seen strong growth in India we feel this is the right time to explore the extent of this predisposition when it comes to our service. India, for us, is a hotbed for innovation globally and experiments such as this provide us deeper insight into the local market and help us innovate around the evolving needs of consumers."

Shanker didn't say whether the service will be rolled out elsewhere around the world.

The India launch, however, comes against the backdrop of ongoing efforts on Uber's part to improve relations with officials across the country. The issue started last year when a rider was allegedly raped by an Uber driver. Soon after, Uber was banned from the capital territory of New Delhi over claims that it was operating illegally. Several concessions later, Uber is now back to operating in Delhi, though officials are still expressing displeasure with the service.

Meanwhile, Uber has launched several new features to enhance safety in India. The company has partnered with SafetiPin, an India-based company that analyzes the country's streets to make them safer. Uber has also incorporated a panic button within its app that alerts police as soon as a person touches it.