The experiment will take place in the city of Hyderabad and marks a change from the credit card payment strategy that it has favored so far. It is the first time Uber will accept cash payments, the company said on Tuesday.
Hyderabad was chosen because Uber has many drivers and riders in the city, whose population was estimated at about 8.6 million people by the U.S. government in 2014. People can select the cash option up front in the Uber app and pay the amount shown at the end of the ride, it said.
Uber did not respond to a request for comment.
India seems an obvious place for the ride-hailing company to start experimenting with cash payments. While card-based transactions are gaining acceptance there, most payments are made in cash, according to a recent study from market research company Euromonitor.
However, Euromonitor predicted the number of credit card payments will keep rising steadily in the coming years. It also noted that there is "tremendous growth" of electronic transactions in the country, thanks to broader Internet access and booming sales of low-cost smartphones.
Smartphone shipments in India jumped 90 percent year over year in the fourth quarter of 2015, with 21.6 million units shipped, research firm Canalys reported in February.
While Uber users in Hyderabad will be able to pay cash, they still need an Uber account to book a ride, and a credit card is required to get an account. However, it's not necessary to have a minimum balance in their Paytm wallet, which was introduced for Indian users last year, Uber said.
Loek is Amsterdam Correspondent and covers online privacy, intellectual property, online payment issues as well as EU technology policy and regulation for the IDG News Service. Follow him on Twitter at @loekessers or email tips and comments to loek_essers@idg.com