[SDP]

Originally Posted by aashishnb

This limited availability of permits is based on a conversation with one of the earlier taxi service drivers I had (Meru, Tab, etc.). Could be that these 'aggregators' do not follow the 'Radio Taxi' licence which are limited.

UBER is not under Radio taxi model.

However, Uber's business model, at least currently, is similar to the E-commerce business model - use investor money to acquire customer by subsidizing / discounting sales so that they get used to it. What they call in the industry - 'Customer Acquisition Cost'. E.g. A book with MRP of Rs. 150, costs the dealer Rs. 120, but is sold at Rs. 90. Similar thing is happening to Uber / Ola. They pay the driver more than what they get from the customer. This 'loss', is funded with investor money.

Therefore, at some point of time in future, to turn profitable & cash flow positive, they will need to either reduce costs i.e. pay less to drivers or increase revenues i.e. charge the customers more.

True, they are blowing VC money at this point of time to get a foothold and build a driver as well as customer base. The thing is, the base is currently small and they would be blowing money for a limited period, so the net money being spent for driver/customer acquisition would still be relatively small. When they scale up to 10x 20x 50x their current base, a small %age cut from each fare is going to add up to a fairly large amount soon. I won't be surprised if UBER becomes net positive is a year or two. After that the VCs are going to mint money.

They have already started charging customers more using the Peak Period Surcharge where fares go up between 1.2X to 2.2X.

Surge pricing as a concept is there right from UBER's early days internationally. Its about factoring in the real-time demand and supply equation in the asking price. I don't find anything wrong in it.

[Bhodrolok]

I have had the discussion with an Uber driver, he was driving his Innova. While we were stuck in a typical Bangalore logjam, I asked him how much he made on an average. He said that the most months he would make 90k to 100k after his costs thanks to Uber.

In fact he also mentioned that his son was finishing college and he would be sending him to do his MBA in New Zealand thanks to Uber. He specifically mentioned how happy he was with Uber as he liked to put it "Aap ke liye bhi achcha hai, Humaare liye bhi!"

[poloman]

Originally Posted by Bhodrolok

I have had the discussion with an Uber driver, he was driving his Innova. While we were stuck in a typical Bangalore logjam, I asked him how much he made on an average. He said that the most months he would make 90k to 100k after his costs thanks to Uber.

In fact he also mentioned that his son was finishing college and he would be sending him to do his MBA in New Zealand thanks to Uber. He specifically mentioned how happy he was with Uber as he liked to put it "Aap ke liye bhi achcha hai, Humaare liye bhi!"

Sorry to say that this driver is going to be in debt very soon. He is not realizing this pampering by Uber is not going to last and they may even start charging the drivers for services once the honeymoon period is over. Sad commentary of typical Indian mentality. Milking and overstretching the parents' resources. The son sadly is not learning any lesson from his father's uber experience. A MBA graduate is not going to make even 1/5th of what his father is earning as starting salary.

[anandkv88]

From my only experience in talking to a driver of Ola, he said he was earning around 25-30k per month after all expenses. During the period of incentives, he was getting almost the same amount extra.

Once the fad dies down and the number of taxis proliferates, lets see how things turn out.

As someone said, make hay while the sun shines, let them earn while the goodie bag is full.

[DevendraG]

I spoke to 2 Ola drivers today in Pune & got the below details:

1> The bonus period is now over & Aggregators now charge % on each ride - Ola charges 15% & Uber charges 20%. After each ride, Aggregator deducts it's share & transfers the rest to Driver account.

2> Bonus/Incentive - Only got to know about Ola. If you complete 5 rides during peak hours (3PM - 11PM), then they receive bonus/incentive. Didn't ask the amount. Didn't get Uber info.

3> Peak Hour Surcharge - Although Govt rated it illegal, it's still being done here in Pune atleast. Ola takes the Surcharge money completely (apart from 15%). Uber follows the 20% of the ride share.

4> Ola is more customer oriented & so if a customer books a cab & a cabbie starts for customer location & travels 5 KM & then if the Customer cancels, Cabbie doesn't get anything as the Customer isn't charged anything. Whereas Uber charges the Customer in such cases & hence Cabbie gets the share too.

5> Both the Cabbies picked up Indica Vista via Loan @ 14%.

6> Both cabbies on average drove 6000-7000 KMs every month (i.e ~225KMs/day). One cabbie said that he spends approx 5000 INR towards maintenance every month. I found this to be high. IMO, either he misquoted or misunderstood it.

7> Ola Mini charges INR 14/KM. 15% Aggregator share. So Ola Cabbie gets INR 12/KM.

8> Cabbies earn INR 7-8/KM via Middlemen on Company Transport. Middlemen gets INR 10/KM. Plus Middlemen deducts approx 1000 KM as fake/excess KMs. Running on Company rolls is higher but ownership value is missing & hence most Cabbies are turning away from Company Transport. So Companies are mostly using Mini Bus/Tempo Travellers for regular pick up/drops. In cases where its just 1 or 2 employees in a remote area, Companies are asking employees to use Cabs which they further reimburse.

9> One cabbie (from Pune) had a poultry & was running the cab as an extra. Other cabbie (from Latur) was working solely with Ola/Uber 14 hours a day.

10> Normally a driver (if hired) takes a salary of 12-15K & works 6 days a week. But trust issues are huge coz the risk is high.

11> One cabbie said that he's into this business since last 3 years. On asking why he skipped studies, he said that no study would've got him a salary of 30K/month, so he chose to quit.

12> A driver can be registered with multiple aggregators at the same time.

Rough calculations:

Ola Earnings @ 12/KM for 5500 KMs: INR 66,000/-
Diesel (INR 60/Ltr & Avg 16): INR 20,625/-
Car Loan EMI @ 14%: INR 11,000/-
Maintenance: INR 3000/-

Earning: 66,000 - 20,625 - 11,000 - 3,000 = INR 31,375/-

[Contrapunto]

Originally Posted by DevendraG

I spoke to 2 Ola drivers today in Pune & got the below details:

1> The bonus period is now over & Aggregators now charge % on each ride - Ola charges 15% & Uber charges 20%. After each ride, Aggregator deducts it's share & transfers the rest to Driver account.

I use Uber regularly (in Hyderabad). All of them say that Uber has started deducting their share before remitting funds every week. The Innova drivers are in a bind between whether to focus on the tourist taxi space (full day bookings but collecting money is a pain) vs. Uber (small journeys, but payment happens like clockwork). Most of the Innova owner drivers seem to do a mix and match of both.

[Dry Ice]

Originally Posted by DevendraG

2> Bonus/Incentive - Only got to know about Ola. If you complete 5 rides during peak hours (3PM - 11PM), then they receive bonus/incentive. Didn't ask the amount. Didn't get Uber info.
....

Rough calculations:

Ola Earnings @ 12/KM for 5500 KMs: INR 66,000/-
Diesel (INR 60/Ltr & Avg 16): INR 20,625/-
Car Loan EMI @ 14%: INR 11,000/-
Maintenance: INR 3000/-

Earning: 66,000 - 20,625 - 11,000 - 3,000 = INR 31,375/-

Let me try to fill the bonus part. These companies pay upto 3000/day if you are logged in for 12-hours or more. Plus there are bonuses if you complete 6 trips within, say 5 hours - this is at specific times of day like early morning or late night when availability is low.

Add these and you have at least 3500/day over and above what you calculated.

PS: This info is latest as of May 1st week.

[ameyawaghmare]

AFAIK, these values are changing in the last 1 or 2 years. They were getting an incentive to simply complete a stipulated number of rides a day. Later, they started providing incentives for number of trips during peak hours. After some time, they were given 2 rs./km on every ride. Going by the latest reports in this thread, the aggregators have established themselves and now charge 15% of the trip.

Essentially, the early birds who plunged into driving for Ola/TFS have definitely got benefited widely in the past 2 years and continue to do so.

Ola/Uber etc. have successfully made the taxi drivers as well as customers get habituated to the cab concept. Consumers will create demand for more taxis, and there would be taxi drivers willing to earn a big buck by catering to the demand of these customers. These companies have virtually expanded the marketplace of of taxis by increasing demand and supply both. They can simply sit and keep collecting their money which is only going to increase with time unless any disruptive innovation comes out.

Just like we had a dot-com-boom bubble around 2000, a financial/economic bubble around 2007, VCs/investors seem to be in the same mood around this time! Rakesh Jhunjhunwala was skeptical about the entire business model of Flipkart and the likes of these start-ups that are spending investor's money without any real profits or positive cash flows.

Maybe, there is a lot of black money across the world that has reached VCs/PEs that needs to be converted to white along with a steady income in future...

[Contrapunto]

Found this H-U-G-E sized banner in Hyderabad last week. Interesting "spin" is what I would call it. So Uber is clearly promoting the fact that a Rupees 70,000 per month "take" is possible

[shady_lawyer]

A quick update on the earnings of Uber drivers. Uber has now started charging Rs. 1200 per month for the smartphone device from each driver, in addition to requiring them to get their own data pack as well.

Uber has also started collecting a 28% commission (or a cut as the drivers call it) from the fare amount.

In other news, due to the addition of a huge number of cars in the Delhi NCR region the average number of trips per day has come down to about 5 from the 8-10 trips earlier.

[noopster]

Saw this interesting poster advert on the back of a Pune city transport bus yesterday. It's in Marathi and in any case barely legible but it says, "Make more than 60,000 per month from your T board registered vehicle with Uber". Looks like Uber is cashing in on the popular sentiment- that 60k number really seems to be catching on!

[Dieseltuned]

Originally Posted by noopster

Saw this interesting poster advert on the back of a Pune city transport bus yesterday. It's in Marathi and in any case barely legible but it says, "Make more than 60,000 per month from your T board registered vehicle with Uber". Looks like Uber is cashing in on the popular sentiment- that 60k number really seems to be catching on!

Irony, isn't it ? Using a public transport bus to promote a cab company. Or shall we say that "it's taking the competition head on".

Similar ads have also come up on BEST buses in Bombay.

Regards
Dieseltuned

[noopster]

Originally Posted by Dieseltuned

Irony, isn't it ? Using a public transport bus to promote a cab company. Or shall we say that "it's taking the competition head on".

Similar ads have also come up on BEST buses in Bombay.

BEST I'm not sure but trust me when I say PMPML bus users are NOT going to be the core target segment for Uber. I don't say this with disdain but it's a fact that public bus services in Pune are used mostly by students and those who cannot afford other options. Self-owned two-wheelers and tum tums (the ubiquitous 6-seater rickshaws that actually 'seat' about 3 times that!) are actually preferred to these rattle traps. A car owner wouldn't be caught dead in one.

My guess is they used the buses because of the visibility it provides to a bored T-board driver stuck in traffic.

[Eddy]

Of course. Anyone sitting inside the bus cannot see the advertisement anyway

[Dieseltuned]

Originally Posted by noopster

BEST I'm not sure but trust me when I say PMPML bus users are NOT going to be the core target segment for Uber. I don't say this with disdain but it's a fact that public bus services in Pune are used mostly by students and those who cannot afford other options. Self-owned two-wheelers and tum tums (the ubiquitous 6-seater rickshaws that actually 'seat' about 3 times that!) are actually preferred to these rattle traps. A car owner wouldn't be caught dead in one.

My guess is they used the buses because of the visibility it provides to a bored T-board driver stuck in traffic.

Agreed, I am one of those unfortunate souls who used to use the PMPML buses about half a decade ago.