IT firms jittery as drivers shift to app-based cab services

Nearly 40 per cent drivers withdraw their services and vehicles

Hyderabad: The high commissions and incentives offered by the app-based cab services, which entered the city’s cab market, have affected the transportation of employees of IT companies. Out of some 22,000 cab drivers catering to IT services, at least 8,500 withdrew their vehicles and services.

While huge incentives have made many owner-cum-cab drivers to withdraw their vehicles and services from the regular duties, some drivers started buying their own vehicles on finance. One of the leading Bangalore based cab service Ola, which plans to buy its competitor TaxiForSure, is believed to be luring drivers with unimaginable commissions to attain number one position in the country.

For each booking, the cab driver is provided Rs 200 as incentive and 15 per cent commission. It is believed that the drivers are taking home at least Rs 5,000 a day compared to Rs 10,000 average monthly salary provided by the IT companies. Each IT company had at least 50 cabs, which are now reduced to 10 during the last couple of months. “This is completely an unethical practice, which would affect the organised sector of IT and travel industry,” said Syed Nizamuddin, president, Telangana State Cabs and Bus Operators Association (TSCBOA).

The TSCBOA representatives took up the issue to the Deputy Chief Minister Mohammed Mahmood Ali, Transport Minister P Mahender Reddy and Transport Commissioner Sandeep Kumar Sultania. Demanding ban on the services, they alleged that the working module of Ola Cabs was similar to the Uber Taxi, which faced a nation-wide ban after the incident of rape in December 2014, in New Delhi.

The drivers are being provided with iPhone 4s, which has application that cannot be deleted. However, if the phone is switched off, the GPS also gets switched off and cab cannot be tracked. The amount of money which is being spent by the company does not fit into any category of investments or spending. It is believed Rs 2,000 crore of venture capital is being pumped in by the company. This also lures the prospective customers through its App. It gives free first time ride upto Rs 200 bill.

V S Prasad, Head Traffic Awareness Sub-Committee and Former Secretary of Cyber Security Council, believes that almost 40 per cent cabs were taken over by the Ola in the city, which is providing incentives beyond reason. He said the Bangalore-based company may not sustain for a long term.

It is alleged that like the Uber, the Ola Cabs too do not do any background checks for their drivers. Prasad also points out at the security risk the cabs pose as the company is not doing background checks. “We feel that the Uber Taxi kind of thing should not happen in the city,” he said.

However, the city management of company is not ready to reveal the details of the incentive package being provided to the drivers. “We cannot provide the details as the main office is in Bangalore. Moreover, the scheme changes from time to time,” said Krishnan, City Manager of Ola.

By:Md Nizamuddin