Lead Story

On a collision course

It’s a do or die battle as local taxis slug it out with Ola and Uber. But it’s not going to be a joyride for the cab aggregators either

Illustration: Rashmi Shinde

Navin Kumar, a 35-year-old Uber driver in Delhi, can’t hide his frustration. It is apparent in his voice as he speaks. “I was better off without owning a car,” he sighs. Two years ago, Kumar was employed as a driver with a corporate house, a job that fetched him Rs.17,000 a month doing the rounds of the city office and the airport.

That changed when Kumar was bamboozled by the Uber-Ola marketing spiel that promised drivers joining their network more than just a better life. There were tales of how the children of drivers were going to English medium schools, and how even postgraduates were hitting the road to earn that extra buck. These tales spurred many like Kumar to cobble enough money, either by selling jewellery or some asset, to make that downpayment and register a brand new vehicle with Ola and Uber. Kumar, too, availed of a loan to buy a Maruti Swift Dzire. Initially, the going was good. Till mid-2016, he made an impressive Rs.70-80K a month. But the honeymoon period did not last for long. Today, Kumar’s earnings are down to Rs.15,000-Rs.18,000 a month. “I need to drive additional hours for that,” he complains. What Kumar claims to take home is hardly enough to cover his expenses, which includes a Rs.13,000 monthly loan instalment. Fuel, maintenance, and other costs make ‘Uberpreneurship’ an unviable pursuit for him.

This explains why in February, a distraught Kumar participated in a strike with fellow Uber drivers facing similar woes. Their demands included revival of higher incentives, discontinuation of commuter pooling, and a base fare hike. Having earlier doled out generous payouts to attract drivers, both Ola and Uber have gradually lowered their incentive structures. The reason? The number of drivers plying its vehicles substantially increased, resulting in fewer bookings and lower incentives.

Avnish Bajaj, managing director of Matrix Partners India, an early investor in Ola Cabs, explains, “What has happened is that drivers have upgraded to a more expensive lifestyle. Let’s say they have bought two-three cars or bought a property. That’s what the challenge is — not that the model is unsustainable for them.”

Uber and Ola did not respond to queries sent b

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