Calcutta: One of the country's first radio cab services is all set to make a comeback in the city.

Mega Cabs, which was outplayed by app cab aggregators Uber and Ola, is eyeing the "premium" market with an extended fleet of 1,000 cabs.

Over the past three years, Uber and Ola have been battling for a share of the price-sensitive cab market in the city. The market is now more or less divided between the two "disruptors" and app cabs outnumber yellow taxis but the initial fare incentives have now mostly been withdrawn.

Vikram Anand, director, Mega Cabs, admitted that the radio cab had lost out in the price war. "We held back because there was no point playing the money war. Today, both Uber and Ola are withdrawing the incentives they paid drivers and the subsidies that enabled them to offer rates like Rs 7 per km when the ride cost was around Rs 14-15 per kilometre. Both aggregators have sustained huge operational losses. Now the prices are on a more level playing field."

Mega Cabs, which focuses on airport transfers, is now investing in improving technology and services. "Riders are more discerning now and are willing to spend for a premium ride," Anand said.

Mega Cabs continues to charge Rs 21 per km with a 20 per cent night charge and Rs 120 for every hour of waiting. Ola and Uber rates are in the range of Rs 7-15 per km depending on the product used with a base fare of Rs 40-150. However, these fares are often superseded by the surge or peak pricing that make Uber or Ola as pricey as Mega Cabs for most hours of the day.

Mega Cabs is expanding its fleet, a mix of owned and attached cabs, in the city.

Launched in 2001, Mega Cabs operated in the city with around 250 cabs, which has now grown to 350. "By the end of the fiscal, we plan to increase it to 1,000 cabs. We see a lot of traction in the Calcutta market. Apart from the regular point-to-point drops, there is a demand for outstation services, one-way transforms, corporate tie-ups and long-term rentals," Anand said.

Uber at present has 12,000 registered vehicles in the city and Ola 10,000, sources said.