The move to lead the country into becoming a cashless economy seems to have found favour with passengers who use app-based cabs amid poor business figures. There has been a rise of 20% in passengers using the cashless mode for travel, prompting cabbies to switch to it.
On the other hand, conventional taxi and auto rickshaw drivers continued suffering losses. Sources said that business had come down by 20%. The first 10 to 15 days after demonetisation had hit them badly with profits getting slashed by 50 to 60%. The situation has only improved slightly. App-based aggregators cut a sorry figure too, with business coming down by 10%.
Taxi and auto rickshaw drivers said that immediately after the announcement to scrap notes of high denominations, people were not hailing their vehicles because of the cash crunch.
“Before hailing a cab, people ask us whether we have change for Rs 2000 and Rs500 or options like Paytm,” said Arul Chalak, a cabbie from Parel.
Chalak said that several drivers of black-yellow and Cool cabs wanted to switch to the cashless mode and few had even adopted it to overcome the cash crunch. “We had gone to enquire about a mobile wallet at a bank, where we were told to open a current account first,” he said.
Veteran taxi union leader AL Quadros said that the absence of cashless transaction options in traditional cabs made passengers choose app-based cabs and so they were thinking about adopting the cashless mode. “Some service providers have approached us for it,” he said .
The app based taxi aggregators like Ola and Uber were reluctant to share any facts and figures about the impact on their business after demonetization, but sources said that contrary to the popular belief, that app based cabs made profits after demonetization, even they had to suffer losses as most of the cash of delivery customers of these cabs dried up after decision.
An executive with an app based taxi aggregator, who did not wish to be named, said that for the first few days, bookings went down by at least 25-30%. There has been a slow improvement. The numbers preferring cashless transactions have gone up by 20%.
App based aggregators have also welcomed RBI’s decision to waive additional factor authentication for online payments below two thousand rupees for goods and services. “This waiver is a big leap in the right direction to increase the use of cards over cash,” said Amit Jain, president, Uber India.
Mumbai has around 40000 black and yellow cabs and 1.05 lakh auto rickshaws, besides about 30,000 app based cabs. Of those, 70-80% vehicles are driven by two drivers in different shifts.