As little as 18-24 months ago, cab drivers in Bangalore were ecstatic about how much money they were able to make through the awesome new taxi aggregator platforms Ola and Uber.
On average, cab drivers were able to draw anywhere between Rs.60,000 to Rs.1.5 lakh a month, with around 8-10 hours of driving a day. When they began services in India, Ola and Uber were generously offering drivers up to Rs.500 per ride, and excellent incentives based on easy to reach targets. Minimum guaranteed salaries were also a part of the deal when drivers signed up in early 2015.
Gradually, changes were made to salaries, payments, incentives and even the percentage that a driver takes away from each trip. It became harder and harder for drivers to keep up their level of earnings. In two short years, drivers were no longer able to sustain their Rs.60,000 to Rs.1.5 lakh incomes even with double and triple shifts – which were as dangerous for sleepy cabbies as they were for unsuspecting passengers. But cab drivers had no other choice than to pull extra shifts, as many of them had active loans, taken on the basis of the trust they placed in Ola and Uber’s initial payment structure.
As a result of pulling a classic bait and switch on their drivers, Ola and Uber now face mass protests in all major Indian cities from drivers and unions supporting worker’s rights. Cab drivers feel unjustly treated and trapped by the corporate cab aggregators.
Cab drivers in Bangalore have been protesting since Monday, rendering corporate employees unable to travel to and from work, resulting in a lot of chaos for companies and customers alike. The cab aggregators have refused to discuss these issues with cab drivers or unions – who are now turning to local politicians and ministers for help and to have their grievances heard.
Ola has declined to comment on these recent events.
Uber has released a very unimpassioned and generic comment to the press assuring them that the company remains committed to being a good transportation solution, without really addressing the issue in question.
Why does this matter to you, the customer? Well, Ola and Uber need to maintain their current crorepati-club profits every year, and they cannot do so if they cave to cab drivers’ demands. The only way to satisfy their drivers and generate a profit the likes of which the average Indian will never see is to pass the buck to the customer.
On the condition of anonymity, a high profile investor in Ola recently said that the only right answer is to charge the customer higher prices and allow drivers to continue earning 80% of the new, higher rates. This way, both cab aggregators would be able to generate a handsome profit, and drivers would stop striking. The only party that will be affected negatively is the one without any say in the matter – the customer.