Driver income continues to fall after Uber and Ola withdraw incentives
With cars on loan and salaries to pay, drivers of Ola and Uber, who earned over a lakh per month, are finding it difficult to make ends meet.
Narendra, an Uber driver for three years, is worried. He has two cars, both registered with the cab-hailing company — one is driven by a hired driver, who takes Rs18,000 in salary.
“My cars are on loan… If I can manage to pay off the installment and maintenance cost after giving the driver’s salary, I will be happy,” said Narendra, a resident of DDA Flats in south Delhi’s Kalkaji. He said he makes only a third, or perhaps a fourth, of what he made earlier.
Uber and its local rival Ola attracted lakhs of drivers, promising higher incomes. At its peak, drivers made up to Rs1 lakh a month, thanks to fewer taxis, high incentives and even higher demand.
It offered Rs2,000-Rs3,000 for five to six rides, to up to Rs12,000 for 17-18 rides, every day. Ola, Uber’s local competitor, offered similar incentives.
That’s not how it is anymore — with a large number of Uber and Ola taxis on the road, the demand has decreased, which led to strike by cab drivers in February demanding better benefits, accident insurance, relaxation in working hours, higher pay and a reduction in the per kilometre rate, which is Rs6 — far lesser than autorickshaws and government prescribed rates for AC and non-AC radio taxis.
As incomes fell, drivers were forced to stay on the road for longer hours to earn the incentives, without which driving an Uber or Ola cab doesn’t make economic sense, because of low fare structure.
Uber and Ola have done away with the incentive plan, which drivers said will make matters worse. “At least the incentive ensured that we made some additional money apart from the fare, which is very low,” said Sumer, an Uber driver.
For now, Uber has stopped charging its 20% commission of the fare, and is offering an additional 20% of the billed amount, but Narendra said that this is nowhere close to what he made with the incentives, and fears that the additional 20% is “temporary”.
The company had signaled to the end of the incentive regime. “Uber rolls outs incentives and promotions to introduce the service in new cities... As more riders use Uber, drivers are busier and can earn more... and allows us to adjust incentives over time,” Amit Jain, president of Uber India wrote in a blog on March 3.
The situation is not very different for Ola drivers, who are becoming all the more agitated. Bijender Kumar said that the situation has become even worse, after the strike. “The money is reducing every week. On Thursday, till 6pm I could earn only Rs513 even when I started at 5.30 am. I got all ride shares which took me to Ghaziabad, Delhi and Gurgaon and they were all Rs40-50 per passenger. It was never so bad,” he said.
Ravish Dev, another Ola driver, said that the new rule to get some additional amount on the total bill is “worthless”. He complained that drivers who leased the cars from Ola get preferences on booking, even if they are in the same area. (Narendra complained of a similar situation with Uber). “This has severely impacted the total bookings we get in a day. From thousands, our daily earning has come down to a few hundred,” Dev said.
Both Ola and Uber have partnerships with carmakers such as Mahindra, Maruti Suzuki and Tata Motors for cab leasing.