Uber and Ola strike will hit us, but the drivers' plight is real
Changed models of incentives and fares have impacted their earnings severely.
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From midnight Sunday, March 18, drivers of cab aggregators Ola and Uber are to go on a strike, in key cities such as Mumbai, Delhi, Bengaluru, Hyderabad and Pune.
The indefinite strike will hit hard a large section of commuters, who opt for the on-demand cab service as it is easily available, spares them the rush of local trains and metro trains, and is not too expensive.
The journey of cab aggregators in India has not been smooth. Drivers of conventional taxis have held agitations against them, app-based cab drivers have protested against proposed government norms, and against Ola and Uber. In fact, drivers struggling to repay their loans have even killed themselves.
So what is it that the cab drivers want and why are the problems refusing to go away?
Press Trust of India has quoted Sanjay Naik of the Maharashtra Navnirman Vahatuk Sena as saying: “Ola and Uber had given big assurances to the drivers, but today they are unable to cover their costs. They have invested Rs 5-7 lakh, and were expecting to make Rs 1.5 lakh a month but are unable to even make half of this, owing to mismanagement by these companies.”
Naik said that while taxi-hailing companies had offered loan-guarantee letters to drivers through the Mudra scheme without any verification, they were now defaulting on repayment as their costs were not covered. Their incentives had been cut drastically, almost reducing their income to half.
Drivers also allege that Ola and Uber give preference to company-owned cars over driver-owned vehicles.
They want, among other things, that drivers who have been blacklisted over customers’ complaints, be reinstated.
Why the problems
When services such as Ola and Uber started off, everyone was happy. Customers had door-to-door connectivity at any hour of the day in the comfort of an air-conditioned car, and didn’t mind paying a little extra. The companies were witnessing huge demand. Drivers, with lots of rides and subsidies and incentives from the firms, were raking in the money.
It seemed too good to be true. It was.
The companies were not making money. The subsidised fare and the driver bonuses – for number of rides, the kilometres clocked – money was being pumped in from venture capitalists. The acche din were over as this money dried up.
Ola and Uber now mean business, and have changed their model accordingly.
Factor Daily quotes an Uber spokesperson as saying: “As a two-sided market, we reached a tipping point in India, where sustained high demand from riders and drivers allows us to begin reducing higher levels of incentives for drivers and discounts for riders, to operate more efficiently…,”
The same website says: “A source close to Ola said incentives are only one of the components of overall driver earnings. The cab-hailing company has rolled out other programmes to maximise utilisation. This is a function of overall ride time to the total time spent by a driver partner on our platform – it has increased significantly.” “This had led to an increase in overall earnings for driver partners.”
What the cab aggregators are saying is that with the rise in demand, the drivers are making enough from their rides, and there is no reason to incentivise them further.
The drivers don’t agree. Across cities, they talk of their income dropping by as much as Rs 20,000 to Rs 40,000 per month. For most, this is a bigger problem than just lesser money to take home. It means they can’t pay instalments for the loans they took to but their cars.
Even the weapon of the strike is not very effective. During a similar strike in Delhi in April 2017, for better benefits, accident insurance, relaxation in working hours and higher pay, among others, all the companies had to do was wait till desperate drivers came back to work.
Governments have failed on two fronts for things to come to such a pass. First, private cab aggregators managed to become this popular because public transport in most cities is over-burdened and inadequate.
Second, no effort was made to regulate them. Indeed, states are yet to come up with well-defined policies to govern operations of app-based cabs. In this scenario, flashpoints – ride sharing in hatchbacks, which is technically illegal, the issue of a cap on surge pricing, the use of CNG by such cabs, whether they should have local city licences or a national permit – continue to surface in different states, such as Karnataka, Delhi and Maharashtra, respectively.
While customers will be inconvenienced by the strike, it will be well to remember that the drivers too are victims here.