[Passiautonate]

4 Points from my side to see who is actually benefiting from app based taxi model-
- Consumer- Essentially an OLA prime ride in Bangalore city comes between 15-20 re per km. Even Micro and Mini comes in the same bucket so rides are not economical. Convenience yes but with drivers earning coming down bad behaviors are back to haunt

Cab drivers- With so much cabs in the market 8-10 rides an average driver is making per day translating to 2500-3000 revenue. After fuel cut and OLA/ Uber share each driver takes home 1000-1500 home. Vehcile EMI could be as high as 50% of income. Higher road tax and permit costs doesn't help the driver specially in a city like Bangalore

Ola/ Uber share is 20-30% per ride as conveyed by few drivers. Real benefiters here basis economies of scale.

Now even if this margin is brought down to 10% a drivers earning would be supplemented by 100-200 re max per day. Would that be sufficient??

Any subsequent increase in price will push commuters towards autos and lal peelis which would again hamper prospects of these drivers. So eventually setting 20-30k per month realistic expectations with drivers can help. Here I believe reliance/ Jio's proposed model could work as they are coming up with a pay based model.

I know few white collared employees who used to get jealous with 1 lac+ pay check Ola/ Uber drivers were making in 2014-15 but we all knew the same was never sustainable.

[GrammarNazi]

Because these aggregators mostly only replace the 2nd or 3rd family beater car, you & I may NOT be as affected. But those Taxi guys will be (seems many already are) left in an extremely financially vulnerable state.

These drivers will not even be able to get Uber to recognise themselves as a union, which is primarily why they were called "Partners" / "Independent Contractors". Some of them did succeed in another contry, but with our kind of Legislature & Judiciary, they shouldn't even dream of such relief.

But they'll have to somehow manage to out maneuver these aggregators, failing which, these drivers will fall into a financial mess with heavy car-loan EMIs, else they'd have a very real risk of losing the assets like their houses/lands, which they/their parents created over a lifetime. This'll mean they'd have to be tied up / effectively enslaved to OLA/Uber for several years.

Solution : Don't complain about status quo, Build the alternative.

Yes, it'll probably not be easy to beat brand Uber.
Yes, Uber may burn more capital to prevent it from succeeding.
Yes, even OLA/Uber may try unethical maneuvering tactics.

[i74js]

I sympathize with drivers, yet I fail to believe that the promise of monthly income of 1 Lac per month is not something which has been signed by both parties. No one has signed on the dotted line.

I am aware of several Uber drivers, who are well read / even graduate and beyond and have decided to take plunge in become Uber drivers. They were clearly aware that there is no end to capacity addition / new drivers getting associated with the aggregators and thus the competition within the Ola / Uber network is bound to happen.

These companies have to get out of incentive arrangements as few smart drivers manage to complete numbers by taking up shorter trips during peak hours while others keep on struggling for 15 - 16 hours in a day. They should make it straight, km linked incentive; may be even extend it to weekly calculation instead of daily calculation for incentive.
Also if a cabby is found carrying same passenger daily to short distance (say less than 10 km); the system should be able to identify such drivers for playing tricks with the system.

The companies need to bring their house in order and same applies to these drivers, else no one can sustain and such a wonderful app based mechanism / convenience will be lost and we will again be at the mercy of companies like Easy Cab / Mega Cab, who have looted us with Rs 23 per km during day time and robbery during nights !

[rawnak]

I think the need of the hour is to come up with business model which is sustainable from consumer, driver and aggregator perspective. starting bottoms up approach
1) Driver : A model which assures around 50k per month for driver with 12 hr duty after all expenses (EMI, fuel, maint). If he is living a decent life, he will be more courteous, loyal and hence provide better consumer experience
2) Aggregator : put decent commission on top to drive the business
3) Consumer : a per km fare which is less than radio taxis
Some cap on number of taxis getting added in city so existing drivers get decent business.

At the end of the day, as a consumer i would be happy if i get the following
1) convenience of hiring cab (thru app) and it picks up in 5-10 mins
2) clean, well maintained cab and safe driver (both will get impacted if driver is overworked and under-paid)
3) cost which is reasonable (may not be lowest but is low enough that i dont want to take out my car)

I think this price can be arrived by uber/ola per city which can support the eco-system.
I as a consumer dont mind paying little extra if that helps enable decent living for driver and his family while I retain the convenience , safety, hassle-free ride.

[deehunk]

Originally Posted by SDP

I don't blame the customers at all.
It might seem that way due to my "Indian mentality" comment, but what I really meant was - Indians have a knack for 'value'.
There was really no need to drop to 8 and eventually 6Rs per km.

Exactly, both these operators are hell bent on knocking each other out of competition and paying price for a poor business strategy. This also is a good example of too much automation without understanding the requirements can create a huge mess. The drivers are being harassed in Bangalore traffic, there are many drivers who have come from villages due to severe drought from 3 years, these people still pray for good rains so that they can go back. My humble request to these taxi operators is please do not exploit people for your business needs. Take a re-look at your strategy developed by corporate astrologers who are building business models based on planetary(cars) movements.

[speedmiester]

The cab companies are only after number of trips to show to their investors to ask for more money. Giving incentives and lowering prices was the only way to achieve those numbers in a short time.
Now we are seeing the consequences of hair brained short sighted ideas.

[dailydriver]

Pardon me for being blunt. The current mess is squarely the drivers' doing. Ola and Uber are capitalist companies looking to bolster their own revenues and not charities doling out benefits to the employees.

Initially, they may have promised the moon. But that was just a carrot they dangled to entice the drivers. A few early birds did earn the promised lakhs in the beginning.

Once the drivers brought in more of their own cars; and new drivers-cars streamed in at a steady pace, their income was bound to nosedive. It is simple mathematics, that of the denominator remaining constant and the numerator increasing many fold. The drivers failed to realise this.

Let us be realistic and try to list out all jobs that offer ₹1,00,000 per month to an employee who is in the company for 2-3 years. We won't find many, will we?

Add to this the various promotional offers, free rides and more recently the cost of govt licencing, and the companies had no option but to lighten the drivers' pocket.

A thorough study of the Ola/Uber finances will be of great academic and market interest. Were the lakhs of rupees being paid earlier coming out of real revenues or was it being siphoned off from the investments of venture and angel capitalists?

The companies and the drivers are trying to safeguard their own individual interests which sadly are not only different but divergent too. They are working at cross purposes, thereby harming each other and most importantly denting their public image.

[varunsangal]

1. The drivers have come up against the ruthless world of corporate companies and not the subsidized government policy. The company will extract its pound of flesh.

2. The initial VC money meant that there were huge incentives to join the company and the initial bunch of drivers actually made a huge amount of money.

3. The drivers 'gamed' the system quite a bit. For e.g. there was a huge incentive on the number of ride calls picked. The drivers picked the call but then called the customer to say that they are too far away, so please cancel and book another one. The customer got another cab and the driver got his incentive.

4. The drivers gamed the system by joining the two aggregators at once and keeping both running but not picking rides thereby increasing logged in time incentive.

5. Drivers tried the kaali-peeli tricks, taking longer routes etc. Customers complained and Uber etc happily paid the customers back the money to maintain reputation. But the money has to come from somewhere, was VC earlier, now tighter controls on drivers.

Result: The company has tightened its purse strings, raised the bar to gain incentives. Voila! Suddenly the cab business is not so viable anymore.

[Bh.P]

Originally Posted by SDP

....entry level services like Micro. 6Rs per KM! Given Indian mentality, ..

Have you checked the actual cost per KM after the base rate and the per min charge is added? (I am not even talking of peak pricing)

Here are some examples from my past 3-4 trips
Ola Micro 8.6 KM - Rs 132 ~15.5 per KM
Ola Micro 8.9 KM - Rs 143 ~16 per KM
Uber Pool 14.5 KM - Rs.170 ~11.75 per KM
Uber Go 13.6 KM - Rs 187 ~13.75 per KM

None of the above have surge pricing. The average comes to around Rs. 14 to Rs 15 per KM. There have been times where this has gone up to Rs 20 per KM for me. I have NEVER got a per KM rate of less than Rs 10 or 11. So, the Rs 6 per KM is not a correct number to work out with. If share, the driver gets from 2 parties (may not be the case always).

Also, currently, the drivers earnings is based on incentives, more than the trip revenue. I was talking to a Ola driver last week, and he gave me some numbers like Rs 1500 for completing 6 trips in a day, 3500 for 12 trips and 5000 for 18 trips. He said the Uber incentive scheme was better.

His grouse was that the incentives have gone down compared to what they were earlier. So, it is the greed and the dejection of not getting what they got earlier which is leading to this discontentment.

If they were smart, they should have seen this coming. Ola and Uber are not here to do charity. They are currently luring both drivers and customers by incurring losses. It is only a matter of time that they will squeeze the incentives to drivers, and jack up the prices for customers. If they don't, they will wind up after VC funding dries up, and we all go back to our autos and Merus.

[Nav-i-gator]

1. For a drive of around 3 KM in gurgaon (at 12 noon or 8 PM) costs about Rs 73 (and about Rs 55 for share) with Uber. This isn't cheap.

2. Uber drivers keep asking me to change the destination mid way to far -off places like Manesar, Sohna saying "it will get me more incentives. You pay the original amount only" - they are not sage themselves, cheating the company.

3. Unlike brick & Mortar companies, workers here are independent businessmen (drivers with their own car). They can any day part ways if they are unhappy. Uber/Ola business model is symbiotic. They give taxi owners business for a fee. There is no question of drivers being harassed.

[pratyush6]

Honestly, I find the argument that Uber/Ola are cheap slightly hard to believe. If I go to my office, it works out around 18 per km (it's more than 15kms), smaller distances are more like 11 - 14 per km (Uber Go/X).

I drive a diesel too in Bangalore and running costs are close to 6-7 per km including maintenance. You can probably add EMI and it would be 8 per km. Assuming a 20% cut for Uber/Ola the profits works out to be atleast 5 to 6 per km. Now incentives are on top of it. If a driver drivers close to 200 kms a day (a fair estimate) - you profit is over 1200 + incentives, which should land you close to 2000. Now that is a decent amount, not an earth shattering figure but a 60k Salary is not bad.

My numbers may be slightly off, but I have used broad estimates as I know it. And as free market economy works, I think they have a right to strike equally as a competitor has the right to launch a new product. Uber does not own anything, it's as they say a platform, so anyone is free to walk away. As long as there is demand, someone will fulfill it.

[Dry Ice]

I have never paid 6/km for a ride! Drivers are conveniently forgetting the ride time charges. The lowest I have paid so far maybe around 14/km.

This is a complex problem and both sides are at fault to some extent IMO.

Uber/Ola for continuously dumping investor money to gain market share and more driver partners. Initial picture was rosy, but now that supply is more than demand, it doesn't make sense for them to keep doling out the same kind of incentives.

The driver partners for getting greedy and putting all their eggs into this business model. Many went as far as registering on both themselves and then getting their friends/family also enrolled with loaned cars.

There should be some kind of a middle ground that both the parties can agree to. But doesn't seem like any side is ready to relent.

Meanwhile, the auto drivers are rejoicing.

[ashokrajagopal]

If there is any consumer out there who is believes they benefitted very much from Uber, they are in for a shock. I mean, I know people who have Uber as part of their daily routine; " if there is no uber, there is no going to work" kind of people.

Pumping in of money from their investors is almost gone so there are 2 possibiities

a) Uber and Ola increase their prices ( already not so low) and slowly they shut shop.
b) Uber and Ola keep their prices, but drivers have to abandon the jobs, and slowly they shut shop.

With the aggregators shutting shop, there may be new ones coming, 1 or 2, but the same story is bound to repeat. Ultimately, you have to resort to your own car, and back to the choking traffic.

Smaller aggregators like Taxiforsure were either killed off or eaten by the giants. This is pretty much like the Retail model where the Big Bazaars and Reliances came and ate off the neighborhood supermarkets. Now you have to live with the giant stores and whatever prices they charge. A strike or a government interference may be able to drive one big chain away, but another one will come and take its place.

[Eddy]

What I find irritating is that the drivers who do not want to strike are being forced to. You can see Ubers / Olas being flagged out and forced to stop. The customers are being deboarded without any consideration at all.

This is simple and plain goonism.

[narayans80]

Originally Posted by Nav-i-gator

1. For a drive of around 3 KM in gurgaon (at 12 noon or 8 PM) costs about Rs 73 (and about Rs 55 for share) with Uber. This isn't cheap.

The problem is there is no regulated alternative here. Autos (and/or regular taxis) are totally unregulated in most cities and small towns and charge based on their whims and fancies, with notable exceptions in Bangalore and Bombay. I had been on a 'hospital run' about a month back, each ride costed 50-65 a ride which was just a shade above 2 km. Why I still went ahead, was the pricing inconsistency/ haggling with which autos operated.