Anger over a changing model
Cab drivers feel cheated as two online aggregators try to cut losses and duel for monopoly
With over 50 per cent cab drivers back on the road, harried commuters in the Delhi-NCR belt have found some respite, even as the striking trade union, Sarvodaya Drivers Association of Delhi (SDAD), claimed the strike was very much on.
After eight days of uncertainty and suffering, commuters in the Delhi-NCR region could book cabs on their Ola and Uber apps on Saturday, but fares were relatively higher in peak hours. The waiting time for hiring cabs was also longer.
Home-grown cab riding firm Ola and its American rival Uber on Sunday said the strike was over and the cab drivers were back on the road.
Sunday being a non-working day, there are not many passengers on the road. However, Ola’s claim and trade union SDAD’s counterclaim will be tested when offices open on Monday and commuters come out in full force.
In fact, on Saturday evening Ola started sending a notification to its customers, saying "We are back in full strength. Book an Ola and travel in comfort at affordable prices in Delhi-NCR. Ride now". Both Ola and Uber officials told Financial Chronicle separately on Sunday that the “drivers are back on the road and service has resumed and the strike has been called off though not officially.”
However, Ravi Rathore, vice-president at Sarvodaya Drivers Association of Delhi (SDAD), a trade union that claims to represent 1.5 lakh of drivers in Delhi-NCR, said the strike was still continuing. “We have not called off our strike yet. But our ground information is that about 50 per cent of the drivers are plying their cabs and the remaining 50 per cent are still on strike,” Rathore said, when pointed out that Ola and Ober had claimed that the drivers were back to work.
Chaos still prevails in the Delhi and NCR region. Drivers fear retaliation from association members if they bring their vehicles on roads. That is the reason some of them are still keeping off the road.

Sources said trade unions are being led by operators who own multiple cars and hire drivers. Taxi drivers have nothing to do with strike, they pointed out. While Ola is owned by Bengaluru-based ANI Technologies while Uber is a brand from American Uber Technologies, headquartered in San Francisco, California.
Financial Chronicle did a ground check in Delhi-NCR. Sunil Kumar, an Ola driver, was not clear if the strike had been called off. Keshbahadur, another driver, expressed fear that he could be attacked by trade union members if he brings his taxi out on the road. Injamul Haque, also an Ola driver, said he has been told by the company that services would resume from Monday.
One thing, however, is clear that the Delhi High Court’s last Friday order to the Delhi police has gone some way in restoring confidence of drivers. They feel trade unions would refrain from using force to stop them from plying after the court warning.
“Joint commissioner of police (traffic) or any other officer of equal rank nominated by Delhi commissioner of police is requested to forthwith ensure that drivers/owners having contract with plaintiffs (Ola and Uber) and wanting to ply are not stopped or blocked from plying and that their vehicles are not damaged," justice Rajiv Sahai Endlaw said in the order.
Rathore said the strike will continue till “our demands are met”. Hundreds of drivers are still on dharna at Jantar Mantar, he claimed.
Rathore said that there was still no fresh communication from either Ola, Uber or the Delhi government to find a solution to their demands.
Thousands of drivers are on strike since February 10 in Delhi-NCR demanding an increase in fares from the existing Rs 6 per km. They also want the 25 per cent commission the app-based aggregators charge on every booking to be discontinued.
“Our demand is that this fare be raised to Rs 14 and Rs 16 for hatchback and sedan, respectively, from the existing Rs 6 per km and the 25 per cent fee on bookings should be reduced to 10 per cent,” Rathore said.
He accused Ola and Uber for downrightly “cheating” cab drivers with the promise that each cab driver would earn between Rs 1 lakh and Rs 1.25 lakh per month.
Rathore said initially the cab drivers who worked for 20-22 hours did earn between Rs 50,000 and Rs 60,000, but never what the companies had promised (Rs 1 lakh-Rs 1.25 lakh).
Rathore said the income of cab drivers, which ranged from Rs 45,000 –Rs 50,000 a month, had plummeted to Rs 15,000-Rs 16,000. With EMIs pegged around Rs 10,000-Rs 15,000 for the cars bought, it had become a struggle for most cab drivers, he said.
Rathore said the next hearing before the Delhi High Court is scheduled on February 28 where all stakeholders have been called, including managing directors of Ola and Uber.
To achieve market monopoly, both Ola and Uber set a certain number of rides to give out a fixed amount as incentive. With more supply, the probability of finding rides has become less and this problem has now spilled on the roads.
For taxi drivers, the high incentive was the only attraction. They earned even up to Rs 70,000 to Rs 80,000 a month as demand surged. Many drivers bought a second car to make a fast buck when the sun shined. Drivers earned through heavy incentivisation.
“Ola and Uber are incurring heavy losses and it is dependent on raising multiples of private equity funds as sustainability is a massive challenge,” Rajiv Vij, managing director and CEO of Carzonrent told Financial Chronicle. Their target is to achieve a certain level of market monopoly and then raise prices, which would ultimately hurt the consumers, he pointed out.

He said the cab drivers are agitating because their income levels are drying. “Even if they make Rs 20,000 – Rs 25,000 a month, with EMI and recurring costs, they cannot sustain and go on like this,” Vij said, adding that the taxi aggregator model was not sustainable.
Some industry experts had said that Ola and Uber were burning $50 million a month to achieve their target of market monopoly. They also said this business model was not practical. About 50 per cent of the drivers were not even earning Rs 500-600 a day after slogging for 12-14 hours on the road, they said.
Ola and Uber shave maintained that ride share is the future of transportation. Both the companies are spending millions of dollars to make ride-share mainstream.
“Aggregation is the norm in every space and going to be the way forward. But the models that have emerged in the taxi space do not look sustainable. There is a certain Darwinism about the space as well. As the market evolves, the weaker ones will fall off and fitter and more sustainable models will emerge,” said Harish Bijoor, brand expert and CEO at Harish Bijoor Consults.
He said the aggregators habituated the consumer by offering discounted rates but hiked the prices as high as 4.7 times when they almost monopolised the market. “The customer is feeling cheated,” Bijoor said.
“Incentivising is something that is used for seeding the market and finding the right equilibrium between supply and demand. The incentive programmes are restructured as per the demand and supply of the market and is intended to drive in efficiencies. Once the market matures, it will not need incentives. In India we have not set a timeframe for the programme,” Ruchica Tomar, communications head at Uber India, said.
michaelgonsalves
@mydigitalfc.com
With inputs from Noor Mohammad in New Delhi and Sangeetha G
in Chennai
Columnist: 
Michael Gonsalves
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