[fine69]

Originally Posted by faithless_1984

I casually asked him how the business is doing and he mentioned that the cab is earning around 60-70k per month till now. But he is not making any profit right now as his EMI is high and he has to pay the drivers salary. I guess its more profitable for people who drive the cab themselves.

Not really. Driver's salary isn't that high that it'd be eating into the profit significantly. Driver salary these days is 12-14k in Delhi/NCR.

If he's not making profit right now and the cab is utilized fully then the business model isn't good to begin with. I mean the only thing he'd be saving would be his EMI cut, that too after the loan is over and by then the cab condition would also become questionable.

In case your friend has a reliable driver then associating with a good BPO would get him to see profits from Day 1 (assuming the driver does 5-6 routes which is pretty much manageable for a cab driver).

Cab business is only and only based on the driver's skills & honesty. A good driver can make or break the cab business.

[poloman]

Can anyone clarify, is the tax deducted at source for driver salary in these cab companies?
I read in TOI that the UBER run rate in India has touched 400Cr.

[vinit.merchant]

Originally Posted by Rahulkool

He told me that he drives from morning 4 a.m. till midnight.

That is ridiculous. A Negative aspect of the money you make being directly in proportion to the time one puts in. These drivers just keep stressing themselves out, sleeping less. And Uber/Ola also do not want to control this part, allowing drivers to bill 20 hours in a day. Crazy.

If I were you, I wouldn't sit in his cab the next time, knowing he sleeps less than 4 hours in a day.

[fine69]

Originally Posted by vinit.merchant

If I were you, I wouldn't sit in his cab the next time, knowing he sleeps less than 4 hours in a day.

Of course he doesn't sleep less than 4 hours. All cab drivers take naps but then there might be times when they are really sleepy simply because they couldn't squeeze in the nap time between several back to back pickup/drops.

When they don't get adequate sleep they tend to drive fast just to keep sleepiness at bay.

[GrammarNazi]

Originally Posted by faithless_1984

Interesting thread, a friend of mine ...how the business is doing and he mentioned that the cab is earning around 60-70k per month till now. But he is not making any profit right now as his EMI is high and he has to pay the drivers salary....

Originally Posted by fine69

Not really. Driver's salary isn't that high that it'd be eating into the profit significantly. Driver salary these days is 12-14k in Delhi/NCR....

I guess he's prudently trying to repay his interest bearing loan ASAP.

Assume he pays 20k per month to the driver, 50K towards the loan, his car is probably paid for by end of the year!

Within the warranty period!

Originally Posted by saket77

...Actually, I am little concerned about splashing the venture capitalist money by the companies. They sure can generate a lot of sales turnover but no profit. Agreed that they might start profit generation after some time, but will that be enough to wash out the huge losses incurred in past? Who knows when a more competitive business models enters the array? Or probably this is the risk that the VCs are willing to take in order to gain a stupendous profit. It is more like that the online shopping websites who are burning the same VC model so as to gain monopoly over the market; only if they survive long enough and the VCs have more than enough of cash to plonk in the loss making business until they rise. I just hope that these are private investments only so that tax payer's money is not used to bail them out if the situation arises. I frankly do not believe that this business model is sustainable for long. The customer loyalty factor will fade away sooner than they think as the discounts vanish.

Thanks!

100% AGREED. If they were signing contracts binding cabbies to only be allowed to tie up with xyz Cab Aggregator for 5/7 years, then its an understandable business model.

But here it seems the cabbies will make hay while the money rolls in and abandon aggregators when the going gets tough (i.e. when supply exceeds demand and bonuses are stopped).

Theres seemingly nothing to hold cabbies back in the long term, not even an Annual or Bi-Annual bonus model.

Eventually, these VC's would've hurt local businesses unfairly. Hope the MRTP Act is invoked on Suo Moto cognizance by state, unless ofcourse there is corruption involved there (obviously).

Negatives also include that "bonuses" by such companies could quite possibly become the 'front' of some political party to distribute money!

Yet, I believe 90% of Indians are 'Good' people and being Indians, its our hobby to save money. Probably most would try spending it wisely to build another business or buy some land.

[libranof1987]

These income figures sure look fantastic; I do wonder though, if this hysteria will lead people to bite more than they can chew. Clearly, this kind of take-home will not sustain but at the moment, it is inspiring every available blue collar individual to take up a taxi and drive. The attraction might just lead them to take on a ridiculously high debt and then land them in trouble when market correction takes place.

A fundamental difference I see in the Uber model in the US and here is, the motivation for each drivers. In the US, you see most of the drivers being a part of Uber/Lyft for loose change or saving up for something in life and NOT as a primary source of income. You'll find students on semester break, small business owners/servers driving at night for extra income. And this, I believe, buffers them in a way when the model isn't as lucrative. In India, most drivers are turning to Uber as their only source of income (esp. when they're driving ~15 hrs a day) and they are terribly exposed to fluctuations in the business model/scenario.

Originally Posted by fine69

Its not a matter of whether you can or cannot but are you willing to take up this kind of a job?

This guy does a 5am to 10pm shift (15 hours shift). If he works 6 days a week then where is time for family/kids or himself. I doubt whether he carries homemade food for a 15 hr window (if he does then hats off to his wife ) which means he usually eats outside which isn't a good thing to begin with.

Look at the background these drivers are coming from. If they can manage that kind of money without doing something illegal and immoral, exactly which person in their family is going to complain?

I agree, the working hours and the toll it takes on your health are pretty bad but if you look at it, almost all of us, regardless of class of service (esp. the IT folks) are working at least 12hrs a day anyway.

If by working that long, they can assure their family decent living and (hopefully) their children a good education, they're doing a pretty good job at life.

In some sense, it is empowerment.

[Rajeevraj]

Not specifically on Money making, but I recently had chats with a couple of Uber drivers. One in Bangalore and one in Chennai. The Bangalore guy was pretty happy and also said Uber does not have restrictions on number of trips etc.. and hence he has the freedom to take trips as he needs and also ensures he can go on regular taxi trips as and when needed. He said if a driver is off the Uber grid for more than a 3-4 weeks, then it is a problem and they will get locked out.

The Chennai guy said that Uber insists on 10 trips a day to get additional incentives and he is struggling a bit to meet that. Most of his riders were those with free/discounted trips and once that dried up, they no longer use it. SO he is struggling a bit to earn

[Altocumulus]

Originally Posted by Rajeevraj

The Chennai guy said that Uber insists on 10 trips a day to get additional incentives and he is struggling a bit to meet that. Most of his riders were those with free/discounted trips and once that dried up, they no longer use it. SO he is struggling a bit to earn

The free rides is true. I have not yet paid for a single ride. However I still have 8 free rides in my kitty. But my girlfriend after the first free ride from me doesn't even look at normal cabs.

The point here is that Uber/Ola is here to catch the existing regular users not necessarily create new ones. A person who uses cabs regularly would rarely go back to them after tasting the comfort and convenience of an Uber/Ola.

The Uber drivers are professional ones. Driving is the only thing they can do. They are earning much much more than what they used to, and that is evident from cars not being available half the time. Some guys will always crib no matter what.

[fine69]

Originally Posted by libranof1987

Look at the background these drivers are coming from. If they can manage that kind of money without doing something illegal and immoral, exactly which person in their family is going to complain?

That's what my point was too. 1 lakh might look very lucrative to an IT guy earning 50k a month but I wanted to elaborate on the additional baggage/hazards that come with it which us regular guys might not be able to handle.

[vibbs]

Originally Posted by shady_lawyer

So even if a driver makes 10 trips a day from 5 AM to 11 PM (lets assume 2X8 AM to 10 AM window+ 5X10 AM to 5 PM) and (2X5 PM to 10 PM) =Rs. (300x2)+(125x5)+(300x2)=Rs. 1825.

Uber at present is remitting the entire fare to its partners (however this is to increase market share). Assume the average fare per trip is Rs. 150 (never had a lower fare than this)=Rs. 1500

Thus, the total earning (tax free mind you-No TDS, No Service Tax nothing)=Rs. 3325 per day. You work for 28 days, you are not from the 1L figure you see.

He earns that much. yes! Actually he makes close to 1.25L a month

An obvious question that comes to mind is , what is Uber earning? Just the market share? How much market share will they garner and how much more time they need till they even break even if they are paying this kind of bonuses to all drivers despite remitting the entire fare too?

[reignofchaos]

Originally Posted by vibbs

An obvious question that comes to mind is , what is Uber earning? Just the market share? How much market share will they garner and how much more time they need till they even break even if they are paying this kind of bonuses to all drivers despite remitting the entire fare too?

They'll be in the business as long as VC money keeps flowing. Ones that slows down, things will become harder.

[bluevolt]

I read about such cases on Quora often and being working in a typical IT service company, I wonder when I would reach 80-90k per month as take away salary as these uber cab drivers are getting. Sometimes I feel those answers are part of the creative writing by the famous Quora members to have good number of upvotes, sometimes it sounds real.


Mixed feelings!

[ratangera]

I have had conversations with both OLA and Uber drivers, while one innova cab driver (owner) netted 60k a month and has passed on his dzire to his brother. However, rest of them are aware of model and are on fixed salary plus incentive basis, with salaries hovering around 15-18k. Once thing i got to know was that Uber lets you join even if you pre-owned taxi but OLA demands a new one (cant comment on authenticity).
Rightly said above, make hay while sun shines

[shyampsunder]

Ok a lot of people here are very skeptical about the amount of money these guys make and is it sustainable in the long run because many of these cabbies make a minimum of around 60k a month in places like Chennai. The short answer according to me is Yes.

To get a better understanding of this business model, one must get into the problems faced by cabbies. They faced 2 main problems:

1. Traffic during peak hours and rains really damaged their earnings because they earned per KM and they would hardly move 10 KMs per hour during these times.

2. Sitting idle during off peak hours doing nothing. Generally a cabbie in Chennai used to make 3-4 trips per day.

A cabbie needs a certain amount of money per day to run his livelihood and that's why they had to charge Rs 15 to Rs 20 per KM to make ends meet.

Now, Uber and Ola come along and promise rates of Rs 7 per KM. We laugh at this as another VC funded war just like Flipkart and Amazon but its not. Although these people are making loses on every ride, they are able to make people use cabs a lot more. This results in cabs running during Off peak hours. Usually these drivers wouldn't have any trips during this time. They have to initially subsidize this because Rs 7 per KM is not sustainable without a certain number of trips per day (Approximately around 12). But once people starting using it and find it convenient then they would keep using this service resulting in a good number of trips per day. Once Uber or Ola have attained confidence in the number of trips per day, they can slowly scale back the discounts without affecting drivers' earning in a big way.

Due to the sheer size of these companies, they are also able to manage the supply demand situation as well. For example, during rains, everyone looks for cabs to get home without getting drenched. But cabs don't want to ply during rains because of the huge traffic snarls. This results in acute gap in demand and supply. Companies like Uber are solving this issue by introducing surge pricing, where there is a price multiplier on the fare depending on the acuteness of the gap in supply and demand. This results in a lot of drivers entering the fleet making the supply side of things better. Granted, it seems to be favoring the rich but an expensive cab is better than no cab right?

[BoneCollector]

That's a good amount of money. I might be missing something but I have a question, If the drivers are earning money, where does Uber get its earnings from?
And does Uber do anything like a health checkup for the drivers they hire?