[shashi792]

Originally Posted by GTO

[b]
I say, better duopoly than monopoly .

I agree to this. But, I am bit skeptical about a single company capturing the market (Monopoly). Unlike, Google, Facebook, Whatsapp. These sectors are ecosystem driven with $/finance in the loop. IMO, people tend to skip less between service providers when 'Money (Digital Tie-up)' is involved. E.g. Initially, I was tied up to Amazon because, I did not want to give my card details to more E-commerce sites. But, with UPI in play, I have moved away from Amazon only mode.

My Point is, its mostly ease of payment and ease of riding. Tomorrow, instead of OLA, there is an ABC company providing sweater deal for Drivers, the cab base will shift, hence moving ride takers to other platform.

[AMG Power]

Originally Posted by V.Narayan

And now the nation in the larger cities at least is at the mercy of these two for the intra-city transport needs and now gradually for the inter-city transport needs. At some point these two could form an unspoken cartel to the detriment of all....

But that alone does not merit giving them a duopoly.

The investors in Uber and Ola are not here to do good to the nation or the customers or drivers. Their primary focus is the stakeholder and it will always be that. No PE pumps in so much money to good to any nation or customer or driver - they do it in the hope of making a P R O F I T. And no one "gave them a duopoly".

Are we talking about going back to the regulatory regime / license raj of yesteryear OR are we envious of them because they are successful inspite of their drawbacks? If so, isn't that because the customer has weighed the pros and cons and found that they are the better option (maybe it's because there isn't a better option). This is inspite of their bad service, zilch feedback and couldn't-care-less-about-the-customer attitude.

Don't the railways (another form of transportation under whose mercy lies the entire nation) - give everyone a similar raw deal ? Aren't they a monopoly? Don't Rapes, murders, delays, cancellations, rude behaviour et al happen on the railways too - so why pick on Uber - they are certainly several notches above the railways.

And that's before we get into who funds the railways - its a very very big PE that includes all of us through our taxes - this doesn't happen with OLA and Uber. And I'm not going into the other not so straightforward areas that increase the cost of railways. So why are we not talking about them when they are far worse than Uber and OLA? Do we put up with all this because we know we can do nothing about it because it is state owned?

Or are we pointing fingers at OLa and Uber only because they are successful? If not we have to point out the other aggregators such as Swiggy, Zomato, OYO, Big Basket, Dunzo etc who also suffer from bad service and complaints at varying degrees or do we do that only when these aggregators become successful?

[superbad]

I think there are two parts to this discussion :-
1) Duopoly from a customer point of view - I don't think we've anything to worry about, since this exact competition is keeping fares within reach of common man & doling out freebies (cashback, discount, coupons etc).
2) From the employee point of view - Very dicey, no security. It may happen that cash burns force either of the aggregators to take drastic measures which will not consider the fate of their driver partners at all.

[Stribog]

Originally Posted by GTO

Don't think that's likely due to the sheer amount of money involved & burnt. Here's an excellent article by one of my favourite writers - Ashish Mishra - Behind TaxiForSure’s sellout:

That was a brilliant read GTO. I always have loved the Livemint long form articles and this one didn't disappoint either.

[Malyaj]

I have a different view on the link between cartelization and prices. Even if we have multiple players it may not prevent 'fixing' of fares. And here one is assuming that there is fixing. I believe there is a break even number towards which fares, or for that matter pricing in any industry will tend to move towards and will stabilize. New players tend to play copy cat in pricing and unless there is a fundamental difference in the way in which service is delivered which significantly alters the cost structure, there will be little reason to play it differently.

When Meru/EasyCabs/Mega Cabs launched they all charged Rs 20 per km. KSTDC launched its airport taxi in Bangalore at exactly the same price. For passengers the multiple options simply meant cabs in different livery and little else.

As a society we do not like variability in prices as consumers or variability in earnings as employees/vendors. The Uber/Ola model through its variable pricing and incentive plans does just that, which comes across as lack of transparency.

Overall cab fares are low in India, and adjusted for inflation have not changed much since the arrival of radio taxis more than a decade ago. In fact on occasions they are lower than 2007-08 levels.

[manjunathkl]

The only people who are getting a raw deal from Ola/Uber are the drivers. Not the consumer. Most Uber drivers are barely meeting their expenses that too after working very long hours and/or doing all night drives to Airport.

Many Uber/Ola drivers I speak to explain to me how ridiculous the terms and conditions are for their payouts. Guys who avail loans to buy a new cab, they can hardly pay the EMIs and Diesel, Insurance, Repairs and Maintencence. None of the surge pricing we pay is reaching the driver. It takes 5 years to repay and by that time the cab would have run about 1-2 lac KMs. The resale value would practically be peanuts.

The dropout rate is increasing. Ola, Uber is running only because there is a constant stream of drivers getting inducted at one end and equal attrition on the other.

Ola/Uber is using a large pool of unemployed Indians as drivers to offer very low-cost rides to well to do Indians. In the process, pocketing good magin + having complete control on ride allocation, pricing, payments. All this without any risk because they are only an aggregator and not the service provider. It is dream business model that has actually worked.

[Nissan1180]

Originally Posted by manjunathkl

Ola/Uber is using a large pool of unemployed Indians as drivers to offer very low-cost rides to well to do Indians. In the process, pocketing good magin + having complete control on ride allocation, pricing, payments. All this without any risk because they are only an aggregator and not the service provider. It is dream business model that has actually worked.

And this is why there were Taxi licenses in the first place. They were inefficient, and that's why consumers switched. But if someone comes along and streamlines the process, they still offer a better value proposition. The per km rates were fixed, and the waiting time was counted in seconds uniformly through the day. Ola fares within the city are ridiculous if you consider the surge prices (which seem to be on all the time these days in the metros). You pay close to Rs. 30-40 per km which is more than what owning a brand new C segment sedan would cost you over 5 years excluding the resale value. Normal taxis were cheaper.

Anyone who can drive or ride does that these days.

Except the VCs and a few high flying executives in the companies, very few enjoy the situation.

I am talking about the 90+% of educated urban Indians making less than 30-40k a month. Not the top 1-2% with more disposable incomes.

We tried signing up with Ola in 2017, and found out that without incentives, the business model makes 0 sense unless you drive yourself for 12+ hours. In our case the driver ran away with the car and it was a pain to get it back.

Yes, a large fraction of urban millennials continue to use the services for convenience, but with very limited wage growth in sight and inflation at 2 decade high figures, there will be a stagnation sometime, unless the rich can make up for the numbers.

This is a global trend. In Singapore, a Grab driver recently told me how he used the passengers contact from Grab to sign him up to a private transfer agreement. Basically the guy goes to office daily in this driver's car and pays a lower fare. This is how it used to be. It is just that the drivers figured it out and use the grab ride to sign up regular customers unofficially.

Uber's share price is a reflection of how flawed their business model is.

[V.Narayan]

Originally Posted by manjunathkl

The only people who are getting a raw deal from Ola/Uber are the drivers. Most Uber drivers are barely meeting their expenses that too after working very long hours and/or doing all night drives to Airport.... Guys who avail loans to buy a new cab, they can hardly pay the EMIs .... In the process, pocketing good margin + having complete control on ride allocation, pricing, payments. All this without any risk because they are only an aggregator and not the service provider. It is dream business model that has actually worked.

Very well put across by you. Thanks for bringing up the key point that it is the driver-owner or some similar associate putting in the capital investment. Uber/Ola exercise power by controlling the last mile to the customer and owning the customer without investing a penny in capital costs. It may be a great business model for the PE fund and their already very rich investors but is it a great model for society as a whole is the question I request us thinking members of Team BHP to dwell on.

Originally Posted by AMG Power

The investors in Uber and Ola are not here to do good to the nation or the customers or drivers. Their primary focus is the stakeholder and it will always be that. No PE pumps in so much money to good to any nation or customer or driver - they do it in the hope of making a P R O F I T.

This culture that a business exists solely for profit and value creation of the shareholder is the philosophy Milton Friedman espoused in the 1980s onwards and has sadly been embraced by financial shareholders as the holy grail. This is a robber baron approach. A business, especially a large one has vast resources at its command - financial, human, technology, policy influence. And it behooves such an organization to adopt a balanced approach where the interests of all stakeholders are met and not enrich one at the expense of the other stakeholders. That is the philosophy on which a lot of great business empires have been built - read about them please. Having built and sold my own businesses, having invested in PEs and having had PEs invest in mine I am quite clear a business that does not cater in a balanced manner to the fair needs of all its stakeholders - shareholders, employees, vendors, creditors, customers - is doing injustice to society and is not fulfilling its role given the vastness of resources at its command. To make each stakeholder a long term partner you should leave some fairplay on the table for them too. Squeezing vendors and employees, who typically have less bargaining power, simply because you can is not necessarily the only way to do business. You are most welcome to disagree.

Are we talking about going back to the regulatory regime / license raj of yesteryear

I don't recall stating that anywhere or even hinted at this. Please read my post carefully. Thank you.

Don't the railways ..... Don't Rapes, murders, delays, cancellations, rude behaviour et al happen on the railways too If not we have to point out the other aggregators such as Swiggy, Zomato, OYO, Big Basket, Dunzo etc who also suffer from bad service and complaints at varying degrees or do we do that only when these aggregators become successful?

Do you think you are going off the rails here? We are talking of Uber & Ola. If you have an issue with the Railways then by all means start a thread on the subject.

Or are we pointing fingers at OLa and Uber only because they are successful?And no one "gave them a duopoly".

I am bringing this up because they are using extraordinary money power to buy out a market and our incompetent implementation of the competition commission rules and Govt policies are letting it happen. I am surprised they have avoided flack from the competition commission. I wonder how?

Are they successful??? - the jury is still out on that. A business that needs to incur a loss of $2 to earn a revenue of $3 does not count as successful in my lexicon. What they have succeeded at is in introducing some great technology application. Successful as a business - no way.

[BlackMamba24]

I think this duopoly is better but going for worse. Let’s go back to to 2011, I got a new job in Chandigarh. To get a auto we had to come to the main road from the locality I was living in. Their were few cabs running but charged 23/km. And now let’s fast forward to 2017 - Uber, Ola, new job and a new locality. Places where is I used to go for around 300, now I can go for 100 and sometime even less. So duopoly is good.
Now why towards worse; because the answer lies in question itself. It’s duopoly. A business where the customer should be the priority is taken for granted. I have never seen a Uber Go which is clean and not smelly. The basic thing you ask is for a clean taxi and a good driver. Which is a far fetched dream for these two. And the basic services for this business is going down.
Note: This could vary with other cities.

[whitewing]

Oligopolies also have a tendency to game the system for more profits at the ost of other stakeholders.

I recollect reading news from CCI over the years and a quick googling shows that CCI has come down on cartels.
- Cement https://corporate.cyrilamarchandblog...cement-cartel/
- Bearings https://in.reuters.com/article/india...-idINKBN1Y00AN

So, irrespective of a monopoly/duo/oligo-poly, I would tend to think that having governmental oversight. AND oversight by officials who understand the business makes a difference. Of course, this then has the risk that government-raj makes a comeback.

Meru's complaint to CCI was rejected https://www.vccircle.com/cci-dismiss...s-against-ola/
and it was rejected not because there was no merit, but because the industry was in a nascent stage!
In essence, what i read from this is - the CCI has told the other operators that once the industry matures, we will have a look and by that time you would not be there to complain :-)

Key ruling Fast Track Call Cab Pvt. Ltd and Meru Travel Solutions Pvt. Ltd had approached the anti-monopoly watchdog in 2015 alleging that ride-hailing unicorn Ola had abused its dominant position in the market by offering heavy discounts to passengers and incentives to cab drivers.

The complainants added that ANI Technologies Pvt. Ltd, which operates Ola, had violated the Competition Act of 2002 with its pricing move, as other players in the market did not have the means to offer similar incentives to either commuters or drivers.

While ruling in favour of Ola, the CCI observed that the ride-hailing and cab-aggregation industry is still at a nascent stage and any disturbance would disrupt the market dynamics.

Originally Posted by V.Narayan

Are they successful??? - the jury is still out on that. A business that needs to incur a loss of $2 to earn a revenue of $3 does not count as successful in my lexicon. What they have succeeded at is in introducing some great technology application. Successful as a business - no way.

Sir, as usual you hit the nail on the head.


The only reason many are in business is because they have raised funds which they are throwing at the customer. Hope the WeWork effect shows up and brings sanity back.
Else, in the long run, customers will end up having ONE choice, and that being the one who burnt the most money and not necessarily the best one.

[bevivek]

Originally Posted by V.Narayan

I am bringing this up because they are using extraordinary money power to buy out a market and our incompetent implementation of the competition commission rules and Govt policies are letting it happen. I am surprised they have avoided flack from the competition commission. I wonder how?

Absolutely correct. It is just a way to kill the competition.

Across the world Uber is in a battle with regulators who have slowly woken up to the negatives of the Uber model and are fighting back. I believe they are not allowed in some countries now. Unfortunately here, there seems to be no such push back.

The discounts the consumer is getting are really just to kill the competition using venture funded resources. Once the opposition is down, how long before prices 'bounce back'?

While we as consumers have it good, in conversations with many Uber and Ola drivers, I keep hearing that it has become difficult to operate since the prices are so bare boned. Many drivers have taken loans to finance their vehicle and are forced to operate longer and longer hours just to make enough to repay their loans and make a living wage. This cannot be sustained.

[V.Narayan]

Originally Posted by bevivek

Absolutely correct. It is just a way to kill the competition.

Those on the forum who have dealt with the Competition Commission of India {CCI}will know how stern they are about predatory pricing. Ola & Uber are all about predatory pricing and yet they seem to get away with it. While most of us agree that these two have made accessing a taxi easier and less traumatic {than the earlier rude three wheelers} their "kill the competition with money power" will come back to bite the consumer. I wonder how they got around the CCI.

While we as consumers have it good, in conversations with many Uber and Ola drivers, I keep hearing that it has become difficult to operate since the prices are so bare boned. Many drivers have taken loans to finance their vehicle and are forced to operate longer and longer hours just to make enough to repay their loans and make a living wage. This cannot be sustained.

Are the drivers becoming another form of bonded labourers. If there were four service aggregators then there is still a chance of a driver-owner switching between one and another. But with only two dominant players price co-ordination is a heart beat away both for the price the consumer pays and the rates the vendor receives. Dont for a nano second believe that 'these companies have the interests of any stakeholder at heart other than the PE investors. The plight of Ola/Uber drivers could soon get to that of port truckers in USA - https://laborrights.org/PortStrike

[Axe77]

This is the closest I could find to a relevant thread.

Uber is increasingly impossible to lodge a dispute with. Firstly, there is no number or email ID listed where one can email a specific issue or complaint.

If you walk through their pre populated menus, it gives very specific options with no last option like "ANY OTHER". And finally, if you select one of them there is a standard response given that the charge given is in line with the estimate provided and we cannot help further.

AN EXAMPLE.

The other day my mum took an Uber. The destination was Sewri. The car broke down (literally refused to restart) near One Indiabulls Centre at Lower Parel (anyone familiar with Mumbai will know this is significantly way off from the destination both in time (20 - 30 mins depending on traffic) and distance (3 kms or so perhaps) terms.

The full initial estimate provided was actually charged despite her being approx only halfway through her journey.

In such a situation, she has tried every option of challenging the fare but gets the same auto response that the fare is charged as per the correct initial estimate. We even tried selecting that the route charged is wrong but to no avail.

As a next option she tried emailing help@uber.com or some similar ID she got from the desktop website. All emails to that email account are bouncing saying mailbox full (maybe a reflection of how broken they are on customer service)

1. The payment was made in cash and when my mum said she should only pay half the driver insisted the full amount should be paid and she should get a refund from the Uber system.

2. My mum had no choice but to pay him that amount since if he had not shown the amount as paid as per his demand, she would be unable to book her next uber ride (since she would have been shown as not having cleared previous payment).

The amount is not staggering in itself but it is the principle of the matter that annoys me. Uber's escalation and complaint matrix is taking customers for a ride (pun unintended) and there is no proper recourse one is able to take against them.

I would be happy to hear if anyone has any thoughts to add to this. whether to recover this money, is there any escalation method I am missing (perhaps the website offers more options than the app not sure but that should ideally NOT be the case).

Also, just want to open the discussion up for anyone else to add their similar experiences or solutions.

[V.Narayan]

Originally Posted by Axe77

The amount is not staggering in itself but it is the principle of the matter that annoys me. Uber's escalation and complaint matrix is taking customers for a ride (pun unintended) and there is no proper recourse one is able to take against them.

I would be happy to hear if anyone has any thoughts to add to this. whether to recover this money, is there any escalation method I am missing (perhaps the website offers more options than the app not sure but that should ideally NOT be the case).

Also, just want to open the discussion up for anyone else to add their similar experiences or solutions.

I assume the principle of the matter and the associated unfairness is what is important to you rather than the fair. For that poor taxi driver with a (now) broken down vehicle the balance half of the journey your mother paid is valuable money for that man. However Uber deserves different treatment. I would say put out your grievance on social media and let the fun roll.

[Axe77]

Originally Posted by V.Narayan

I assume the principle of the matter and the associated unfairness is what is important to you rather than the fair. For that poor taxi driver with a (now) broken down vehicle the balance half of the journey your mother paid is valuable money for that man. However Uber deserves different treatment. I would say put out your grievance on social media and let the fun roll.

I should have clarified. The problem was his vehicle had run out of fuel / gas or whatever. It hadn't technically broken down.

My post frankly has little to do with the cab driver anyway since how does one determine whether what should be paid is 40% / 50% / 60%. I'm ok to pay the original amount with the system determining the right amount to be paid and processing a fair refund. My problem is completely in Uber insofar as when there is an issue with payment or any other issue for that matter, they have an absolutely useless escalation / dispute redressal mechanism. That should simply not be allowed. This can move beyond mere principle. What happens for instance if someone loses something valuable in an UBER. All I'm saying is they need far better communication channels with their customers.