Ola, Uber lose sheen for drivers as their incomes decline
NEW DELHI: Pramod Narayan’s life changed a couple of years back, when he registered himself with Ola Cabs, the Indian replica of global taxi aggregating platform Uber. He had been a chauffeur in Pune for 18 years, during which time his take-home was ` 15,000 a month. But as an Ola driver, he was earning ` 80,000-90,000 a month.
In Delhi, Poonam got separated from her husband when she was two-months pregnant. After selling lemon and corn on streets, working on and off at call centres, she finally learnt driving. She joined the Meru cab ranks, and with some experience, bought a car and joined Uber, with startling results. “In some months I have made ` 90,000,” said Poonam.
But the good times seem to have slipped by.
Narayan, Poonam and their ilk are coming to terms with tough times. “I barely make ` 600-700 a day, now,” said Narayan. His two daughters have abandoned school.
Poonam is relatively better off, still earning ` 40,000-50,000 a month. But it comes at a cost. “I make that amount since I drive till 3AM . That is when the fares are higher,” she said.
Uber and Ola drivers say their incomes have come down by a third, even halved.
When the two started operations in India, drivers were inspired to register with taxi aggregators. Drivers joined the platforms in hordes — Ola has about 400,000 drivers, and Uber about half of that. Many are registered on both.
The two companies also made it easier for people to buy cars, tying up with lenders for easy financing, and offered medical insurance. Ola offers personal loans and has a Gurukul scheme for drivers’ children for their education. Uber has tied up with state governments to create more “driver” entrepreneurs. All this, and the topping of flexi-time work hours, attracted drivers.
The companies achieved critical mass, but the flow of aspiring cabbies did not cease — but it changed the incentive scheme. “Earlier, on every duty we were paid as much as ` 200,” said Rahul, a driver with Uber in Delhi. Now, for four rides in peak hour a driver gets ` 2,400; for six rides ` 3,000, for eight rides ` 3,500, and for 10 rides ` 4,500.
But due to heavy traffic, drivers are unable to clock the number of rides to avail the incentives.
In Ola there was a minimum guarantee. For every trip, the driver was assured of ` 400. If the fare toted up to less, the balance would be footed by Ola. “That also has changed,” said Suraj Shetty, an Ola driver who owns two cars.
Over the months, the fare per kilometre has also dipped by a third. “It is not as lucrative as it used to be even a year back,” Shetty said.
The growing number of drivers is another reason for the falling income. “The supply of Ola and Uber cabs is more than the demand,” said Narayan.
When supply exceeds demand, returns dip. That’s economics.