Meddling in affairs of Uber, Ola can kill idea of entrepreneurship

Taxi drivers have been an integral part of the vote bank for local parties.

 |  4-minute read |   12-05-2016
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Ibrahim is one of the finest drivers I have known. For more than two years, he has driven me around Mumbai every time I visited. He was employed by a cab contractor hired by the organisation I worked for.

I can no longer afford him or his company, since I turned entrepreneur myself. Two months ago, I switched to Ola, during my frequent visits to Mumbai. It costs me one-third of what I would otherwise pay, if I were to hire a vehicle for the day.

Also read: Uber or Ola, have efficient surge pricing, not caps on it

I am not alone. Most entrepreneurs I meet - and I meet quite a few now - are preferring an Ola or Uber as it saves them a decent pile of money without compromising on the comfort, and more importantly, efficiency.

taxiold-bd_051216010603.jpg Consumers are increasingly moving away from old taxis to cab aggregators.

In fact, why entrepreneurs, I have met a few working people who have sold off their cars and opted for taking a cab aggregator to work, simply because it is a huge saving. No driver salary, no parking charges, no fuel to be filled. Add all this, and compare it with taking a cab aggregator, and the saving is great.

I met Ibrahim recently and he told me he has decided to buy a car and get empaneled with both Ola and Uber. It has been tough raising the funds. He has even had to mortgage jewelry. "I want to be an entrepreneur now to put my daughter in a good school," he told me.

Also read: Neither Uber-Ola nor Kejriwal is to blame

He is not alone. More than 40-odd drivers I have interacted with have the same dream. In fact, when I get off I am told: "Sir, please give us a good rating as that is what will enhance my business. I do not want any tip."

Is this not true entrepreneurship? Is this not the best form of affirmative action? Is this not a good way to bring efficiency?

Yet, there is a lot of anger out there against cab aggregators. They are accused of surge pricing. We forget, all businesses run on a simple premise: Supply and demand. And the market determines the price.

Take any business and that is the basic rule. What is critical is to ensure that the market is not rigged, nor is there a disadvantage to a consumer by unfair or monopolistic tendencies of a company.

Which is why we have regulators. If these entities are indulging in distorting the market, there is the Competition Commission of India which can probe them and if found guilty can even put them out business.

If they provide poor business - and I have seen enough bad experiences being written about them on social media - then consumers will vote with their feet and put them out of business. Isn’t that how it works in every business?

Why then are politicians getting into the picture and shooting from their hip? This is what I think is the reason. The new lot of drivers who are seeing this as an entrepreneurship and flocking to these cab aggregators are obviously taking away the monopoly that the incumbents had.

Consumers too are increasingly moving to these aggregators for the simple reason of convenience and comfort. This is taking away business from the incumbents. While some of them are seeing the writing on the wall and upgrading themselves, most are simply resisting.

At least ten drivers have told me they do not place the Ola sticker on their car even though they are paid a nice sum of Rs 4,000 per month for doing so, because they then become a target and some have even seen damage inflicted on their vehicles.

Like it happens in every business, the disruptor is always attacked.

Now where does the politician come in? Cab drivers have been an integral part of the vote bank for local parties. It has been the case for years in Mumbai and is now the case in Delhi too. They are merely trying to pander to their vote bank.

In the process, they are killing entrepreneurship and rather than allowing regulators or market forces to punish a business that is not performing, they are killing the idea itself.

My sense is we have not seen anything yet. I suspect far greater outrage going forward. I just hope we don’t kill the dreams of millions of drivers out there who are trying to make a better life for themselves.


Vivek Law Vivek Law @viveklaw

The writer is Founder and Editor-in-Chief, The MoneyMile

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