[quickdraw]

Actually, UBER is not interested in only being a Cab for hire company, till very recently it was the highest valued startup in the world for a reason. I think this article should refresh the ongoing conversation - http://www.forbes.com/sites/ronhirso...-data-company/

[Samba]

Let me share my rough calculation in regards to OLa cabs. Car in consideration- Dzire tour.

Few weeks back i did some inquiry and my calculation goes like this-

Per week Ola pays rs 15,000 to the owner, if the car meter is on for 84 hours. That comes to 12 hours per day if the car run for 7 days and 14 hours per day if the car run for 6 days.

So it comes to 336 hours per month and Ola will pay rs 60,000 to the owner.

Now coming to the costs -

I assume the monthly run will be roughly 5,000 kms for a cab in 336 hours with approximately 150-200 kms per day.

The diesel cost for 5,000 kms will be approximately rs 22,000. I took an average of 14 kms per liter with diesel rs 60 per liter.
Car maintenance cost will be rs 3,000 which will include oil change and other necessary parts.
A Dzire tour costs around 7 lakhs on road in Kolkata. (Rs 6.86 lakhs on road + 14,000 for the cab licence/taxi permit) The monthly EMI should be some where between rs 10,000 - 15,000 depending on the down payment.

So the total cost, the owner have to bear is approximately rs - 22,000 (Fuel) + 3,000 (maintenance) + 12,000 (EMI) = Rs 37,000. So the net profit comes to rs 23,000 per month.

But if the owner wants to assign a driver and run the cab then he has to pay an additional rs 12,000 to the driver. So it brings the cost to 37,000 + 12,000 = rs 49,000. So his net profit is rs 11,000 per month. Ola will pay extra incentives on additional hours but i doubt doing additional hours over 12-14 hours per day will be possible or not!

Now per year the profit is rs 11,000 x 12 = rs 132,000.

For a Dzire tour the yearly insurance is rs 28,000 and road tax is rs 12,000. For cabs the road tax is a yearly payment unlike private cars. So road tax + Insurance = Rs 40,000.

So yearly profit goes down by another rs 40,000. Now its Rs132,000 - 40,000 = 92,000. There may be petty police case's, small accidents or repairs. So the approximate profit is rs 90,000-100,000 per year which is around rs 8,000 - 9,000 per month.

Now if the driver drives the car himself for Ola then with incentives and salary he can take around rs 20,000- 25,000 per month.

[Contrapunto]

I had been having an interesting time deconstructing the business model in discussion with the Uber drivers en route to office and back home for the past few weeks (I drive 3 days a week, and take an Uber the other 2 days).

There are two different earning models, one for the "owner-driver", and other for the "driver on rent". Let's take the second one first.

Drivers (apparently) are paid approx. 25-30 bucks per trip and a fixed salary per month, with a commitment that he does at least 25 trips a week. The fixed salary is in the range of 6-8 K per month. Most of the drivers typically work flat out from Friday morning to Monday morning, since 80% of their business happens over the weekends, ferrying people to and from party-spots. On the other days, they start the day early, either in the railway stations or at the airport. In an average week, these guys do 75 "trips". So their average earning comes to ~ 7-8k from incentives and ~6-8 K from salary. So the Rs. 20,000 figure is just about right. The "drivers" are paid their incentives every Tuesday (Monday is Uber's official payout day) and the salary is paid monthly. The driver bears the fuel cost for "loitering" to incentivize "fuel-optimal" behavior. So after fuel costs, apparently, they are left with ~ 15 k per month. So its not such a great life, though the money is not bad.

For the "owner-driver", life is better, since he gets to keep it all. So, in the same model (75 trips, average Rs. 150 per trip), he earns around 45 max 60 per month. Most of the cars are on loan, typically an average EMI of 8-10 K per month. After defraying for maintenance and fuel, he would be left with 30K. I did not hear of any bonus/incentive- especially in Hyderabad

The trick, apparently is to maximize weekends and peak hours and to have a yogic sense of the hotspots which give you "surge pricing".

Well, this is specific to Hyderabad and may be grossly inaccurate. I would love to hear other views as well. But somehow, I am a bit skeptical about "super-profit" opportunities. That arbitrage may have been available initially, but the supply seems to have caught up with demand.

[ACM]

A driver who owns on loan his own Innova and runs it on Uber makes a Gross of between 1-1.2L per month.

This has been the trend for a while but is expected to go down once Uber removes offers that it is making to gain market share.

They after costs do take a net of 75k plus per month. But it is also about how smart the driver is and knowing the right places to wait at the right times is a big factor.

I am giving the example of a specific hardworking owner driver that I know personally.

[balajisv]

I was recently at the customer service lounge waiting to pick my Zest. Over heard two cabbies talking about tough times with Ola. Then, the topic continued as I went for a test drive with the service advisor.
The service advisor said that he has seen many drivers who took into buying new cars on loan seeing the huge incentives doled out by Uber and Ola. As these companies drastically reduced their incentives payout, these driver entrepreneurs are facing challenges even to pay their EMIs.

[Mr. Nobody]

i read a article that these cab drivers earn 70k plus a month ! with Uber ones earning even more. is it actually true ? i have a degree and yet earn much less than half. Might just start doing it on weekends to earn a few extra bucks easily.

http://timesofindia.indiatimes.com/t...w/46002226.cms

[JD1]

What is most concerning to me in this discussion is the long hours that drivers are putting. While ordinarily we appreciate hard work and putting long hours to earn more money; in this case it is dangerous as they are behind a wheel and that means if they fall asleep while driving due to fatigue, they are not only putting their own life, but the lives of their passengers and other vehicles/pedestrians on the road in danger. Knowing how much regulation is in our country (or the lack of it), the government is not going to wake up to limit the number of hours per day/week till a disaster happens - see how the Maggi story is unfolding! (and surely the aggregators are not going to restrict their drivers as well till they are forced to - self regulation is virtually non-existent). Just like airlines have regulation around flying hours and mandated breaks, these drivers too should not be allowed to be on roads beyond a permissible limit. That would ofcourse bring down profits for everybody, but in turn will enhance safety.

Regarding profits, Ola & TFS have already started Ride time charges in Bangalore to make more money, pinching the customers in the process. I personally was a Ola customer till the ride time charges were added and now have switched to Uber. What is to stop me to move to a new aggregator if one comes along? What could differentiate (apart from pricing) is the driver attitude, friendliness, customer service but I haven't observed any difference between Uber or Ola. Infact once I booked an Uber and Ola cab came (taxi had Ola print all over it), so when I asked the driver what's this all about, he said he has switched to Uber but hasn't removed the Ola branding from his taxi! Either he was moonlighting with both or it was an attrition case! Will be interesting to see how much loyal the drivers would be to the aggregators once the incentives dry out and competitors start to poach them.

[Mr. Nobody]

Envious that even after having a college degree i'm earning less than half of these drivers. Contemplating becoming an uber driver on weekends to supplement my income. Do they allow to just work on sat and sunday ?

[Eddy]

Originally Posted by Mr. Nobody

Envious that even after having a college degree i'm earning less than half of these drivers. Contemplating becoming an uber driver on weekends to supplement my income. Do they allow to just work on sat and sunday ?

AFAIK, you can drive weekends only but you'll need a commercial driving license.

[chaith.turbo]

Originally Posted by Mr. Nobody

Envious that even after having a college degree i'm earning less than half of these drivers. Contemplating becoming an uber driver on weekends to supplement my income. Do they allow to just work on sat and sunday ?

I know people how are already doing this in Bangalore. Mon-Fri working in a cubicle, Weekends work in a car. You can probably earn 10K each weekend.

[alpha1]

Originally Posted by quickdraw

Actually, UBER is not interested in only being a Cab for hire company, till very recently it was the highest valued startup in the world for a reason. I think this article should refresh the ongoing conversation - http://www.forbes.com/sites/ronhirso...-data-company/

Thanks a lot for that insight!
I want to kick myself for not thinking on those lines earlier ...

Originally Posted by Mr. Nobody

i read a article that these cab drivers earn 70k plus a month ! with Uber ones earning even more. is it actually true ? i have a degree and yet earn much less than half. Might just start doing it on weekends to earn a few extra bucks easily.

http://timesofindia.indiatimes.com/t...w/46002226.cms

Don't you think it is for the good?
In India almost everyone is a techie graduate, not because they have the talent, mettle or desire, but that is where they think the easi(er) money lies.

Now if taxi driving becomes more lucrative, we will have more people taking it up - thereby improving the taxi services, decreasing the number of people earning degrees, and perhaps improving the salaries of the degree holders (because there will less of these people now)!

[SDP]

Want to share my views which are slightly off-topic.

For me, the best part about the the rise of Uber/Ola etc is the possibility that this competition could show the yellow-and-black taxis (and autos) there rightful place. The 'regular' taxis and autos invariably run on CNG and still the per km rates are already high. On top of that they keep on going on strike and engage in other arm-twisting tactics, demanding increase in fare .. eventually holding the customers to ransom. With CNG, their running costs are very low and I believe most make a good amount of money, if they are hard-working and diligent. There is obviously a difference between what owners (white uniform) and drivers (khaki uniform) earn. With the limited taxi-permits, I believe there is a unfair entry barrier which the existing taxis/ricks exploit.

I sincerely hope that Uber/Ola etc don't end up in a regulatory tangle. With the "union" lobby power that the regular taxis/autos have, that's a distinct possibility in future. Even with the incentives gone over a period of time and the aggregators asking for their own cut from the fare, I would still look forward to Uber/Ola surviving and giving good competition and providing a much better alternative to regular taxis/autos. That might put some sense into the unruly taxis/autos and overall the customers would benefit from better service, better availability and better reliability.

[Amazing]

Originally Posted by Eddy

AFAIK, you can drive weekends only but you'll need a commercial driving license.

Will the normal 4 wheeler license not do ? Do we have to have 2 licenses then , one for normal and one for commercial car ?

also, can anyone use his normal 'white plate numbered' car , or you need to register the vehicle with commercial 'yellow plate ', to be using it in Uber ?

[Eddy]

This is what I had read earlier.

Source

the basic requirement for a driver to partner with Uber is to have valid documents pertaining to third party vehicle insurance, a commercial permit to ply a taxi as well as a driving license.

[silversteed]

Originally Posted by JD1

... once I booked an Uber and Ola cab came (taxi had Ola print all over it), so when I asked the driver what's this all about, he said he has switched to Uber but hasn't removed the Ola branding from his taxi! Either he was moonlighting with both or it was an attrition case!

I've spoken to quite a few such taxi drivers, and all of them have the Ola and Uber devices. Once, I booked an Ola, the taxi arrived, and the driver was using GMaps on his Uber device for navigation. Another instance, the driver had allegiance to Ola, while his partner who drives the same taxi when he's off duty, takes care of Uber customers. They had an agreement on sharing the expenses and earnings. And what was more interesting was, both of them were graduates and left a decent job they had in one of the gulf countries to settle down in India.