How the dreams of thousands of Ola and Uber drivers are turning sour

Once app-based cab aggregators became popular and their driver population burgeoned, they pruned incentives and began charging drivers hefty commissions. The pandemic only made matters worse

In offices, coffee shops, FM radio stations… wherever there is conversation, you would hear about the woes of people who use Uber or Ola. Cabs are difficult to find and take long to come. Cancellations are commonplace. And drivers refuse to switch on the AC in order to save fuel, even as a heat wave sweeps through north India.

That’s nothing compared to the stories the cab drivers on these apps tell.

Ranjit (name changed) has been a driver on both Ola and Uber in Mumbai since 2015. When he started with Uber in 2015, his initial earnings were so good, he soon bought another sedan. His monthly earnings were now nudging the Rs 1,00,000 mark. Then cab aggregators started to get more drivers on their platforms and incentives began to plateau. Ranjit’s earnings started to go down.

“I sold both the cars and bought a used one,” he says. The third car didn’t stay with him for long. As his income fell to near zero during the pandemic, the bank took the car away.

Today Ranjit is a driver with Uber, but the car belongs to Everest Fleet, a Mumbai-based startup that provides vehicles to cab aggregators. He says his salary is now nudging Rs 20,000. Business Standard could not independently confirm the average driver earnings with Everest Fleet by the time the story was published.

Speak to any other driver and the story is similar. During the initial days, app-based cab aggregators splurged on drivers. There were incentives aplenty, no commissions, cash offers, and bonuses to attract drivers to their platforms. Things changed as they gained traction in the market and the driver population on their apps burgeoned.  

The worst came during the pandemic, as the lockdown minimised commutes, hordes of people started to work from home, and people generally avoided using cabs for fear of contracting the dreaded virus. According to news reports, in Bengaluru alone 30,000 to 35,000 drivers either had to sell their cars or banks took them away as EMIs dried up.

Mohammad Fahimuddin, a cab driver in Telangana, has a story similar to Ranjit’s. He has been a driver with Uber for more than five years. Early on, he would easily make Rs 45,000–50,000 a month. Not anymore. “Today, even after driving for 12 to 14 hours a day, I end up earning Rs 20,000 a month,” he says.

After paying a commission of 30-35 per cent to Uber, Fahimuddin has other expenses such as fuel, whose price has gone up sharply, and maintenance of the vehicle.

Meanwhile in Mumbai, drivers with cab aggregation apps get pulled up by the Regional Transport Office (RTO) for not having permits. In March this year, the Bombay High Court chastised Ola and Uber for operating in Maharashtra without licences. The High Court asked both the companies to get licences by March 16. However, in order to not inconvenience the commuter, the court allowed these cabs to operate.

The drivers find themselves caught in the middle. Vidya Anil Shelke, a driver on Ola’s platform, ends up paying Rs 8,000 to Rs 9,000 every month in fines because she does not have the permit to operate her car as a taxi.

“Our condition is bad, especially with earnings now barely covering our expenses,” she says. Before the pandemic, Shelke could save Rs 25,000-30,000 a month after paying for fuel, maintenance, and her family’s upkeep. She barely saves Rs 10,000 a month now.

A detailed questionnaire sent to Ola remained unanswered. While an Uber spokesperson on commission said that they do not share city-wise commission details.

Meanwhile, with rising consumer complaints on surge pricing and frequent cancellations, the government has warned cab aggregators to address these issues. But several cab drivers and driver associations remain skeptical.

“We have a very simple question, the government came out with Motor Vehicles Aggregator Guidelines (MVAG) in November 2020, why has that not been implemented? These guidelines address the surge price, cancellation as well as commission to be paid to these platforms,” says Shaik Salauddin, national general secretary, Indian Federation of App based Transport Workers (IFAT).

On compliance with the MVAG, Uber spokesperson said: “Uber is compliant with State-specific rules wherever they are defined in India.” Ola did not answer any of the queries.

When asked what has the company done to increase the stickiness of drivers on its platform and improve their condition, Uber spokesperson pointed towards the recently constituted Driver Advisory Council (DAC) to engage with drivers better.

“The Council will facilitate a two-way dialogue between Uber and drivers to address critical issues and improve drivers’ platform experience. The newly formed council held its inaugural national meeting in Gurugram. Over 35 drivers were chosen from 6 cities to be a part of the first Council,” stated a blog on Uber’s website.

Uber also said that the company has committed approximately Rs 100 crore towards supporting driver partners. Some of the milestones include the Uber Care Driver Fund with an initial corpus of Rs 25 crore from Uber that benefitted 100,000 driver partners. For 2022, the company announced Rs 2 crore worth of Covid financial assistance programme. Micro loans worth Rs 18 crore were facilitated for driver partners in the last 2 years among other things.

Salauddin calls the formation of the DAC as an attempt by Uber to create a parallel union of its own. “The DAC is no different from the IDG that Uber setup in New York and signed the secret contract with. It is no different than the secret agreement that Uber has signed with UFCW in Canada and with the GMB Union in the UK. When there is already a strong driver organisation with three years of public history doing immense work, why would a company set up an alternate institution unless they have malicious intent?” he asks.

In the midst of all the questions and accusations, the commuter suffers. Pune-based Sarita Joshi (name changed) recently booked a cab using an app to go to Nashik. “I realised that the AC was not working. When I asked the driver about it, he refused to acknowledge it,” says Joshi. When she threatened to complain, the driver sanguinely said she could go ahead and also cancel the booking if she so desired.

Joshi and her family sweated all the way.