Ola, Uber drivers on a bumpy ride

Hyderabad: Not long ago, Ola and Uber, the popular taxi-hailing apps, went to the cities and towns across the country, proclaiming how they succeeded in turning poor drivers into money-churning entrepreneurs with monthly incomes exceeding Rs 70,000 or more.

But, things seem to have turned topsy-turvy now with drivers, who lured by the promises of high-earnings bought new vehicles on finance, facing loan defaults and financial hardships, thanks to oversupply, drastic cut in incentives up to 60 per cent by the online cab operators.

Increase in number of trips required to be completed by the drivers to be eligible for incentives, is also compounding their woes. According to industry insiders, over 15,000 vehicles signed up by the app-based taxi operators have been returned to financiers by the drivers, while scores of others sold their vehicles in the last two to three months alone as they are unable to pay loan installments.

“We are finding it difficult to eke out a living as cabs increased multi-fold in twin cities, touching one lakh mark or so. Companies promised us moon when we signed up. They now cut down incentives while taking 25-30 per cent of our earnings as service charge. We have no other option expect returning the vehicle to financier, Mohan, a cab driver, told The Hans India.

Syed Nizamuddin, president, Telangana State Cab and Bus Operators’ Association, squarely blamed Ola and Uber for the sorry state of affairs. “Ola and Uber companies together signed up 65,000 to 70,000 cabs in Hyderabad whereas the demand is for just 15,000 cabs in the city.

There lies the real problem. Due to this oversupply, many cab drivers are not getting sufficient rides, leading to steep fall in their earnings,” he explained. Nizamuddin further said that some of Ola and Uber drivers moved away and started offering their services for IT companies.

Alarmed by rising delinquencies among taxi drivers attached to the app-based operators, banks and financial institutions are not offering loans to such aspirants. “Majority of banks are not willing to offer loans for taxis meant for Ola and Uber,” Saidulu, a cab driver, bemoaned.

The trend is not any different in other parts of the country. A recent report by RedSeer Consulting estimated that Uber and Ola had cut incentives by almost 60 per cent in just one year, from nearly 80 per cent in Q2 2026 to Q2 in 2017. At the same time, they increased the minimum number of trips that the drivers are required to do for availing incentives.

For Ola drivers, the limit is 12 trips while Uber drivers need to do eight trips a day excluding peak hour rides. Consequently, the registered cab supply between the two major tax-hailing operators had come down to about 3 lakh vehicles in Q2 2017 from a whopping 5 lakh in Q4 2016. That indicates that nearly 2 lakh cabs logged out from app-based operators across the country in nine months.

Meanwhile, Uber claimed that most of its drivers were earning decent incomes. “Currently, 80 per cent of drivers across India who are online for more than six hours a day make between Rs 1,500 and Rs 2,500 net, after Uber’s service fee,” Uber India said in an email response to The Hans India.

“As our business has grown over four years in India, we are seeing sustainable earning opportunities for driver partners and sustained interest in driving with Uber, with a 60 per cent year-on-year increase in driver sign ups,” it explained. However, Ola did not response to our queries.

By P Madhusudhan Reddy