Team-BHP - Uber, Ola drivers unhappy with remuneration, to go on strike

Several Uber and Ola drivers have been protesting in Delhi NCR from the past three days, thus disrupting cab-on-demand services in the city. The drivers have expressed their unhappiness in regards to the remuneration being given by the online taxi aggregators. After failing to get any satisfactory response from the companies, the drivers are now planning to announce a strike in all major cities of the country.

Media reports claim that around 50,000 drivers in Bangalore, 25,000 in Hyderabad and 5,000 in Chennai will be announcing a strike on Wednesday, February 15. The drivers are mainly focusing on Bangalore for marking their protests as it is the largest taxi market in the country.

The drivers working with Uber and Ola claim that they were initially promised a monthly revenue of around Rs. 1 lakh. However, in the current scenario, the monthly revenue figure modulates around the Rs. 30,000 mark. Out of this, most of the drivers need to pay car EMIs of around Rs. 16,000 - Rs. 18,000. This drop in revenue is thus taking a toll on the driver partner's profit.

Source: ET Auto

Uber, Ola drivers unhappy with remuneration, to go on strike-uber-ola.png

Link to Team-BHP News

While speaking to one of the cab driver about the issues, he got back saying they promised us 1 Lakh per month. He is not able to differentiate between revenue, net profit etc. Anything you try to ask further, the response is "Main gareeb hoon, mujhe kya pata" (I am poor, what do I know).

I am not sure but looks like this will become a political issue and will turn out to be another corporate vs poor fight.

I will blame the cab aggregators for trying to expand way too quickly - sacrificing quality, lack of clarity in the business model (or ground level understanding of the people they are going to deal with)The incentive model is also affecting road discipline (rash driving by drivers), cancellations, fights with customers and what not.

If the aggregators relent and agree to the demands, the cab hailing app companies will nothing but one wheel extra than the auto guys !

Quote:

Originally Posted by Cool_leo_guy (Post 4145022)

This is what is happening in this country, first get into a service in sufficient numbers, then escalate your demands, carry out protests and hold the service to ransom by carrying out strikes and sometimes violence.:Shockked:
This is becoming an all too common modus operandi.:deadhorse

This is indeed the modus operandi:

1) Crowd can do anything
2) Cases generally do not go beyond one arrest and a day's lock up - so the confidence increases.

More to say but not right in this forum.

This was bound to happen one day, wasn't it. Sad as it may be, it is foolish of the cab drivers if they thought this would be a perpetual golden hen. Once Uber/Ola got sufficient cars on the road, it was only a matter of time until the incentives came down.

Uber and Ola are not even making even profit yet, they're just blowing VC money.

While I do feel bad for the drivers because far too many people ended up buying expensive cars such as Punto when they could have been more comfortable with a DZire, this is their doing and anything on the lines of bands/strikes/violence is just not acceptable.

If they go on strike won't it be their livelihood that is affected? How is this arm twisting going to work? Don't think Uber/OLA can do much considering the losses the companies make currently right?

They are free to be independent and operate their own taxis. They want higher wages, but don't want to scout for customers, as the app does it for them. I am not sure this strike will help them in any manner

The right to strike is theirs to exercise. Every worker in every industry has this right of collective bargaining. I am not sure why some BHPians believe it is wrong simply because it causes inconvenience to us the customer.

I can well believe that Uber & Ola have not made the terms & risks crystal clear to their driver-vendors nor do I believe they made it clear that once they have reached a certain market share the happy hunting days for the driver-owner will whittle. I have only used Uber twice that too in the last 20 days and both drivers spoke of the commercial terms having been pared down. Both understood that as Uber now had market clout it will start cutting costs as prices are regulated.

Against the tide at TBHP, maybe, but my vote is with the drivers. Each day of strike is a loss of livelihood for them. They reached this point after facing an inadequate response and pondering over their loss of a daily wage. Only those of us who are in India's IT industry have not seen collective bargaining and how it can be resolved before it gets to a strike. But ask any brick & mortar entrepreneur and this is par for the course - workers don't reach a strike point just like that - it takes two hands to clap. A management has to be really inexperienced or obtuse to let things simmer till a strike occurs. And these driver-owners are not even organized with the labour arm of a political party.

My experience of having dealt with (and still dealing) unionized labour with political affiliations is that talking, constant over communication, empathy, a firm stand and willingness to walk the middle path are all needed to avoid things getting to this point. When workers go on strike the cancer is already in your face.

Trade Unionism. Protectionism. And all the evils of the legacy Communistic thought process!
But yes, it is important, while recruiting process partners, that they are all on the same page and fully apprised of the revenue possibilities and share and the profits etc.
Saying that, there is no excuse for shirking hard work (and being a driver undoubtedly is hard work) and being mindful of the ups and downs that any business inevitably must fall prey to.
But for sure, all these businesses which went the route of "Acquire consumers and market share at any cost" even to the extent of BURN and Capital Dumping, are now paying the price. The great "Rationalization" is visibly upon us and we are slowly but surely heading back to fundamentals of business - control costs, drive profits. No getting away from this, is there?
All these "get rich quick" schemes...men will always fall prey to them, as long as they are on earth because a fundamental part of our psyche is unmitigated "greed".

Since everyone seems to be blaming the drivers, let me share the other side of the equation.
Uber/OLA has set ridiculously low rates for their entry level services like Micro. 6Rs per KM! Given Indian mentality, this is where the max demand is. The share/pool options further reduce the per km rate. This has been done to create a sizable market and to wipe out competition like old black-and-yellow cabs, cool cabs, Meru, TabCab etc who charge 20+ Rs per km. For a diesel taxi, just the fuel would cost 4-5Rs per km in city traffic. CNG taxis would possibly have slightly lower costs. So basically what OLA/UBER has been charging the customers is the fuel (and possibly OLA/UBER's commission). So who pays for maintenance of the car, EMI of the car, driver salary and finally profit? Answer is supposed to be "incentive". From what I have heard from OLA/UBER drivers is that the incentive schemes have become more and more restrictive and the the payout has reduced substantially over last 2 years. There is no control over how many cabs OLA/UBER are registering as well. So the number of trips per day would have also come down for most cabs. Result -> less revenue per month and difficult to break even unless you are logging 16-18 hours every day.

So, I don't blame the drivers completely. OLA/UBER needs to relook at their pricing strategy and increase rates so that the service becomes viable for everybody - customers, cabs and aggregators. Currently both aggregators and cab owners are losing and end customer is winning (their rides are effectively discounted by VC money).

Quote:

Originally Posted by SDP (Post 4145110)

When you give such options to customers isnt it natural for them to opt for the cheapest one? Either ways its coming from Ola, i mean ola mini and micro, there is a huge price difference so why not chose the one that's cheaper ? Ola offered mini and micro with no much value add so obviously the cheaper one wins. There were many times indicas and etios liva used to come for mini rides vs the ritz cars in the initial days so the strategy was bad. But wondering how these gets approved by the board !

Quote:

Originally Posted by sunishsamuel (Post 4145127)

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'. If you are travelling to work alone, why bother getting a Ola Prime for 12-13Rs when you know that even the 6 Rs OLA Micro would have AC and decent comfort for a 45 min ride.

So its the predatory pricing by OLA and UBER that is is responsible for the current mess. Even with 11 Rs and 13Rs per km they were significantly cheaper AND better than other options in the market. There was really no need to drop to 8 and eventually 6Rs per km.

Well, the root cause of this problem is the Indian mentality. Initially, ola/uber offered incentives. Even today, the fare does work out more than enough to cover driver salary, emi and maintenance of the car. Uber/ola promises a flat per km charge which is low. The fare also includes fixed base fare and per minute ride time charge. Taking the total to more than Rs 13/km. Only incase of extremely short pool trips have I ever got less money that what I need just to run the car. But such trips are rare.

What most drivers are forgetting is that if ola/uber simply decide to shut shop and go, they will be out of business for a long time. Especially the people who have small cng cars as they are strictly ideal for inside city. The ones with Dzires/ diesel cars could do outstation trips/ sightseeing trips etc. But even that requires having a large network of people who undertake such trips.

Quote:

Originally Posted by SDP (Post 4145187)

There was really no need to drop to 8 and eventually 6Rs per km.

In Kerala Uber had to drop prices since the rumour among the uber drivers is that Reliance is coming out with predatory pricing of rupees 4 per kilometer for the first 6 months. They are supposedly coming out with bike taxi too at rupees 2 for every kilometer with the the drivers being compensated by way of cheap loans from reliance and other incentives, Good times for the customers in Kochi for another 1 year and more. At present on certain days uber is working out much more cheaper than taking the Cruze to work in the hectic traffic with Metro rail construction activity adding to the misery.

Uber has not set foot in Calicut in north Kerala since the auto drivers go by the meter which is working and digital too. UBER DOES NOT DARE SET FOOT IN AREAS WHERE AUTO DRIVERS RUN BY THE METER. Taxi drivers in Cochin have been severely hit after Uber launched the long distance taxi service and the car pool taxi services.