Kiran Reddy, a 33-year-old taxi driver in Hyderabad, is in a dilemma. As president of the OTU (Ola, Taxiforsure, and Uber) Drivers and Owners Association, he’s keen on joining his colleagues in Mumbai and New Delhi in their March 19 strike against mobile app-based cab aggregators over dwindling earnings. Yet, he just can’t afford to.
“Every Rs100 is important to drivers today and we need to earn it by driving,” Reddy told KhabarLive. “Today, we are not able to meet our needs from Ola and Uber.” Most drivers, he said, are now left with around Rs700 at the end of a day’s work and have to set apart Rs500 to repay loans. “I can’t live on the remaining Rs200 and run a family.”
Kiran Reddy isn’t alone. Several other drivers that KhabarLive spoke to across Hyderabad, Mumbai, Chennai, Bengaluru, and Delhi face a similar plight.
Driving for ride-hailing firms seemed lucrative a few years ago when companies like Ola, TaxiForSure (later acquired by Ola in 2015), and Uber started out in India. Flush with funds, these firms incentivised drivers heavily with high rates of commission. However, with the massive increase in the number of drivers and with the companies increasingly focusing on profitability, drivers’ finances have worsened.
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Flush with funds, these firms incentivised drivers heavily with high incentives and low rates of commission.
“If I go on strike now, I’ll only end up losing what little I earn. We trusted the MNCs and took up huge vehicle loans, and also invested in educating our children. We’re now stuck with no money to repay. This is harming not just us but our children as well,” said Ashok Kumar, a driver for Uber and Ola in Bengaluru.
Experts, meanwhile, believe this was bound to happen since Uber and Ola could not have stayed generous forever.
The firms themselves aren’t making profits in any case, given their heavy spends on marketing and technology. If anything, they have been bleeding badly. Ola, for instance, saw losses of around Rs2,313 crore in financial year 2016, up three-fold from the previous year.
Ola and Uber did not respond to KhabarLive queries about the planned strike.
Some of the drivers’ key demands include ensuring business of over Rs1 lakh, as was assured during the sector’s infancy, shutting down the operations of company-owned cabs (as against those driven by drivers who are deemed partners), determining the fares as per the cost of vehicles, and putting an end to low-fare booking.
A few of the demands seem unreasonable, too. For instance, they want their colleagues, blacklisted after having earned low ratings from passengers, reinstated.
In 2013, when Uber entered India and Ola turned more aggressive in the face of competition, the two companies went all out to lure drivers: promises of high earnings and minimal commission—as less as 10%—to be paid to the aggregators.
Thousands were drawn to the industry, with over 1.5 million Indians driving for Ola and Uber alone by now. A good number of them had even quit their salaried jobs.
Often, the buoyed drivers availed of vehicle loans. “The (aggregators) said, please buy the vehicle, come to us, and earn Rs1 lakh per month. So I thought I’ll sell my agricultural land, and I bought a car,” Reddy said.
But as the sector matured and the two rivals turned their focus to profitability, the drivers suffered. “They are rationalising them (drivers) so that their unit economics improves,” said Dhananjay Sharma, online mobility analyst at RedSeer Management Consulting. “It is very essential for them to decrease the incentives. It is in line with their business model.”
The drivers now barely make Rs20,000 a month in a city like Hyderabad after paying steep commissions of up to 30% per ride.
“Now there is no land. The car also is going to be seized by financiers,” Reddy said, referring to his inability to earn enough even to repay his vehicle loan.
Hundreds of drivers are now having to take up multiple jobs, besides driving, to make ends meet.
“They used to give us something like chicken biryani but now want us to settle for Dal rice and papad,” said Azmatullah, a driver of old city in Hyderabad and a part-time painter. Yet, drivers like Azmathullah don’t intend to quit driving or join the strike. “It will be like poisoning my own food,” he said. Neither are many in Chennai, Nagpur, and other cities keen on joining the March 19 strike.
“These drivers are not from a fixed salary (category). They need to pay their expenses so they have to come back on the road,” said Jaspal Singh, co-founder of research and advisory firm Valoriser Consultants.
An overall increase in the number of choices available to commuters in urban India is another reason for taxi-driving becoming a less lucrative job.
State-run buses, which have slashed ticket prices, and metro networks have proliferated in major markets like Hyderabad, Bengaluru and New Delhi, eating into the app-based taxi pie. Besides, Uber and Ola, which together account for 95% of the market, have themselves introduced two-wheeler and three-wheeler taxis.
The firms could have made life a little easier for the drivers by ringing in the changes less abruptly. Their attempt to make more money through surge pricing, too, is driving customers away, drivers said.
Nevertheless, Singh of Valoriser believes the cab firms could have made life a little easier for the drivers by ringing in the changes in a less abrupt manner. The drivers wouldn’t have been so agitated.
In November 2016, for instance, taxi drivers in Guwahati went off the road over reduced incentives. The next month saw cabbies in Hyderabad going on a five-day strike. A month later, it was in Bengaluru. The February 2017 strike in New Delhi lasted 13 days. Protests have rocked cities like Chennai, Kochi, and Mumbai, too.
Since the companies have their own fleets, beside those driven by partners, these strikes don’t hurt them as much as the drivers.
Moreover, the lack of success in earlier strikes has been a dampener.
“What’s the point in protesting?” Bengaluru’s Sufian Yakub said. “People protest so they can gain the attention of the government and the companies involved. We know the companies aren’t listening and the government has washed its hands of the issue. We’re still suffering from the losses from last time. We can’t afford to do that again,” Yakub said.
To tackle the situation, some Bengaluru drivers tried launching an app of their own, Namma TYGR, in November 2017. The venture fell through due to a lack of funds. Now, a Chennai-based group, Ottunar Thozhargal Sangam (OTS), is reportedly giving it a shot.
But for now, the drive seems a long and tiring one. #KhabarLive