“These two companies over the years have not done any innovation,” said Rajiv Vij, managing director and CEO of Carzonrent, the company that owns EasyCabs and Myles.
Vij is talking about Ola and its American rival Uber. He is sore, Easycabs was one of early radio taxi companies, and was growing fast until the fight between the two cab-hailing companies almost killed the radio taxi business.
Huge incentives, promotion schemes, and heavy discounts attracted both drivers and customers. In the next two years, the taxi market, at least in the bigger cities shifted in favour of Ola and Uber.
Both of them boast of more than 4,00,000 driver-partners. If you call them drivers, executives at the cab-hailing companies get offended. “They are micro-entrepreneurs, they drive the cars when they want to,” they say.
But, that is not entirely the case. What a driver earns on Ola and Uber is very little. “That would not even pay for the fuel cost,” said an Ola driver in Delhi, who is on strike, against falling incomes and long working hours.
For the past five days, a large number of drivers are on strike in the national capital region. The strike is indefinite.
The reason: drivers have to drive a set number of rides to avail the incentives, without which the income is negligible.
The promise of high income, and be the master of your own time is slowly giving way.
“Their pricing is not predictable… It changes day to day. In this business consistency is important. That is the reason why Uber has not been very successful in many parts of the world,” said Vij. He is right – Uber is facing similar criticism in London and other part of Europe.
This is also a time for the other taxi providers to capitalise on the strike. In the case of Easycabs, it is targeting the office-goers, a segment which Uber and Ola was chipping away. “We have developed a mobile app, and the bill goes straightaway into your email, or to the office travel desk,” said Vij.
Vij is not the only one. Meru Cabs, is looking at educating drivers about driving cycles.
“It is important to handhold the driver, through the cycles of high and low income… That is what Meru still does. The income is stable… Meru doesn’t force the driver to drive long hours to earn,” said Siddhartha Pahwa, who was the company’s CEO until December 31.
Meru is also pushing advance booking, and business predictability. “That is why more than 80% of the drivers continue with Meru,” he said.
However, Pahwa, a veteran in the industry said that Uber and Ola incentive pricing is not good for the industry. “As the income fall many drivers would leave the industry, and that would be detrimental for the growth in economy,” he said.
Others seem to agree with Pahwa.
“There should be a symbiotic relationship between the cab operator, drivers and customers. If one of them is missing the eco-system fails,” said Vivek Kejriwal, co-founder and CEO, Oneway.cab, an inter-city taxi company.
It is upon the cab company, Kejriwal said, to ensure that the drivers should get a minimum threshold of payment at the end of the day.
“The objective should be that more and more drivers come on board… This (strike) has created a negative impact. There is a lot of service disruption caused,” said Kejriwal.
Meanwhile, Jugnoo, which is an auto rickshaw aggregator, has launched its cab service. “We analysed the issues faced by taxi drivers of late and have come up with a strategy to provide taxi services at prices where drivers do not work at artificially lower rates than their costs,” co-founder and chief operating officer Chinmay Agarwal said in a statement.
(Inputs from Livemint)