A dream ride now in re­v­erse gear

Hindustan Times (Delhi) - - HTINSIGHT - Manira Chaud­hary manira.chaud­hary@htlive.com

THE BUB­BLE BURSTS Low base fares and in­cen­tives cou­pled with stiffer tar­gets bust the dream of thou­sands who joined a trans­port revo­lu­tion brought in by cab ag­gre­ga­tors Uber and Ola

NEW DELHI: Rabin Man­dal is planning to pull out his daugh­ters – Nikita and Ankita – from a mis­sion­ary school in south Delhi and en­rol them in an­other in­sti­tute with lower monthly fees.

An Uber driver, Man­dal has seen his earn­ings dip sharply over the past one year, forc­ing a dras­tic change in the fam­ily’s life­style. His wife, Malati, says they have cut down on non-veg­e­tar­ian food and don’t buy fruits “as much as we used to”.

The story of Man­dal – who ar­rived in Delhi from Bi­har’s Mad­hubani in 1992 – is sym­bolic of a dream gone bust for thou­sands of peo­ple in In­dia who joined a trans­port revo­lu­tion in­tro­duced by cab ag­gre­ga­tors, Uber and its ri­val Ola.

In a coun­try where taxi meant the ubiq­ui­tous Am­bas­sador cars – fondly called the ‘kaali-peeli’ for their yel­low and black colours — cab ag­gre­ga­tors changed the way peo­ple trav­elled, es­pe­cially those with smart­phones.

Peo­ple like Man­dal ben­e­fit­ted from the ‘gig’ or shared econ­omy model in which the earn­ings are shared by the com­pany and the ‘part­ners’, the term used by Ola and Uber for their driv­ers.


Ac­cord­ing to econ­o­mist San­tosh Mehrotra, this was a big di­ver­sion for ex­ist­ing work­ers in an un­or­gan­ised pri­vate sec­tor. Overnight, the driv­ers be­came ‘free­lancers’ who now had con­trol over their lives. Or so it seemed.

Man­dal started off with a Mahin­dra Xylo, which he had pur­chased on loan.

And the early days were good enough to give him hand­some re­turns, mainly due to the in­cen­tives of­fered to driv­ers by the com­pany.

For in­stance, the driv­ers would get about ~1,100 to ~1,400 on com­ple­tion of a par­tic­u­lar num­ber of rides in peak traf­fic hours. This con­cept was new to the driv- ers, with many com­ing from jobs where over­time work with­out com­pen­sa­tion was com­mon. The driv­ers worked longer hours to achieve the tar­gets.

The in­crease in in­come also re­flected in the life­style of many driv­ers.

Man­dal bought two Hyundai Ac­cent cars in con­sec­u­tive years on loans and en­rolled both with Uber. He also hired two driv­ers, who worked dur­ing the day while he drove at night.

Ran­veer Singh, 28, from Nan­gloi in Delhi, shifted his daugh­ter to a pri­vate school as his in­come in­creased with Uber.

Then came the shock as the cab ag­gre­ga­tors cut base fares and in­cen­tives and gave stiffer tar­gets, which of­ten meant spend­ing 14 to 16 hours on the roads for the driv­ers.

“Ear­lier, my in­come was quite sat­is­fac­tory. Now with both the cabs, I’m not able to earn as much as I used to earn with a sin­gle cab,” says Man­dal.

For Singh, the fall in earn­ings means he is not even able to pay the school fees of his daugh­ter.


Close to 30 driv­ers HT spoke to said their monthly in­come in the past one year has dropped roughly by 40-50%

In May, the State Bank of In­dia (SBI) sus­pended car loans for Uber and Ola cabs and seized close to 300 cars for de­faults.

Ear­lier this year, Uber and Ola driv­ers staged mul­ti­ple strikes in Mum­bai, Delhi and Bengaluru de­mand­ing re­in­state­ment of the orig­i­nal in­cen­tives and base fares. Uber In­dia pres­i­dent, Amit Jain, how­ever, wrote in a blog post that the protests were or­gan­ised by a few in­di­vid­u­als who do not rep­re­sent the ma­jor­ity of the driver com­mu­nity.

An Uber spokesper­son at­trib­uted the drop in in­cen­tive to a shift from the “startup mode to a more sus­tain­able busi­ness model” in which the com­pany could in­vest more in driv­ers and their prod­ucts for the long term.


Driv­ers say their prob­lems don’t end at de­creased earn­ings.

Ear­lier this year, an Uber driver, Nazarul Is­lam, lost his life af­ter a BMW car crashed into his ve­hi­cle in Delhi. His wife, Ar­jena Bibi, says they did not re­ceive any fi­nan­cial help from the com­pany.

Uber rolled out an in­sur­ance pro­gram for driv­ers from Septem­ber 1 to pro­vide “free cov­er­age for ac­ci­den­tal death and dis­able­ment, hos­pi­tal­i­sa­tion, and outpa- tient med­i­cal treat­ment in case of an ac­ci­dent”.

Ola did not re­spond to a ques­tion on in­sur­ance, but said it has an in-house phar­macy and pro­vides reg­u­lar med­i­cal check-ups for driv­ers and their fam­i­lies.

De­vel­op­ment econ­o­mist and JNU pro­fes­sor Jay­ati Ghosh is crit­i­cal of the busi­ness model.

“Con­tem­po­rary cap­i­tal­ism is mov­ing to con­di­tions in which em­ploy­ers can es­sen­tially ab­solve them­selves from any kind of re­spon­si­bil­ity to­wards work­ers, whether in the mat­ter of work­ing con­di­tions, pay, or other so­cial pro­tec­tion.”

In April, the Delhi high court put a per­ma­nent re­stric­tion on two taxi driv­ers’ unions from dis­rupt­ing the ser­vices of­fered by Ola and Uber, de­scrib­ing the re­la­tion­ship be­tween driv­ers and com­pa­nies as purely con­trac­tual.

While the HC pro­vided re­lief to the ag­gre­ga­tors, courts in the US and UK have sided with driv­ers.

In a 2015 judg­ment against Uber, the Cal­i­for­nia Labour Com­mis­sion ruled that the com­plainant driver has to be considered an em­ployee of the com­pany and not an in­de­pen­dent con­trac­tor. Also, in late 2016, a UK em­ploy­ment court ruled that Uber driv­ers should be considered com­pany em­ploy­ees and given the “na­tional liv­ing wage”.

But till such time this hap­pens in In­dia, peo­ple like Man­dal say they have no other op­tion.

“Ab yahi karna padega. Aur kuchch toh karne ka soch bhi nahi sakte. Gaadi ki kisht kaise utaarenge (This is what we will have to do now. We can­not even think of do­ing any­thing else. How will I pay for the in­stal­ments of the cars?),” he says.


Un­like in In­dia, where a Delhi high court order de­scribed the re­la­tion­ship be­tween driv­ers and com­pa­nies as ‘purely con­trac­tual’, which lim­its ben­e­fits to them, courts in the US and UK have sided with driv­ers, rul­ing that Uber must con­sider them as...

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