UBER REVIEWS INDIA CAR-LEASING SCHEME
Drivers returning vehicles after the scaling back of incentives
GLOBAL ride-hailing firm Uber Technologies is rethinking its car leasing strategy in India, its second-biggest market, as drivers have returned dozens of leased cars early after the company cut incentives, said people familiar with the matter.
Uber had planned to buy 15,000 new cars last year and lease them out in a bid to attract more drivers — a strategy it had used in other markets — but it suspended the scheme for a while in December after leasing just a third of the total.
After burning through millions of dollars over three years in a battle for market share with local rival Ola, backed by Japan’s Softbank, Uber has cut the incentives it gives to drivers and raised the fares it charges passengers.
The incentives — from free smartphones to cash bonuses worth as much as double a day’s fares — meant drivers could earn as much as 120,000 rupees (RM8,142) a month.
Those incentive payments have been pared back, in some cases to as little as 10 per cent of fare income. Ride fares have risen to 1.5 rupees per minute of travel from one rupee.
Sources said Uber miscalculated the impact that the reduced incentives would have on drivers’ earnings, especially those making lease payments.
At an open meeting for staff in December, around the time the incentives were being reduced, Uber’s India chief Amit Jain said the buying-for-lease scheme was being temporarily suspended while the company evaluated its leasing strategy.
Leasing is only a small part of Uber’s overall supply in India, but is seen as a way to lock drivers on to its platform for longer, and stop them switching to Ola. Reuters
Uber Technologies has burned through millions of dollars over three years in India in battle for market share with local rival Ola.