As incentives and income fall, app-based cab drivers strike their own deals

Cab drivers working with app-based ride-hailing services such as Ola and Uber have seen their incentives and take-home incomes plunge over the past four years putting them in a spot. Drivers, who have bought vehicles on loans, feel the pinch the most and as a result, some seem to making their own deal with the customers.

According to consulting firm Redsheer, the drivers incentives i.e. percentage of gross booking value has fallen from 60 per cent in 2015 to just about 8 per cent in 2018. The sharp fall has pushed the drivers into striking private deals with willing customers where rides are cancelled on the app while customers continue their journey, paying the drivers an agreed amount. These private arrangements have been mostly made in Noida and Delhi.

 

Talking to IANS several cab drivers attributed the reason to lowered incentives given by the company. An Ola bike driver in Noida who asked a customer to cancel the ride and pay him the full amount told IANS: "In a bike ride worth Rs 20, the company is taking as much as Rs 7... what am I supposed to earn?"

Another cab driver proposing a similar scheme said that his "incentives are nowhere close to the amount earned three years back". "Now I have lenders on my head all the time. I do not wish to continue, but I am stuck."

Asked about this trend, Ola said: "We urge passengers to always take rides through the Ola platform and not get into private arrangements with drivers. The Ola platform has specifically built-in safety and security features that are designed to support users from the moment a ride is booked till it is concluded."

"By choosing to disconnect from the platform, users lose out on the safety net that can protect them in case of any anomaly. We encourage all our users to report any untoward driver behaviour immediately using the in-app support functions, or our social media handles which enable us to swiftly attend and resolve issues," the company added.

Redsheer had said that an online cab driver who works around 25 days a month, on an average, makes nearly Rs 50,000 a month. However, a good 40-45 per cent of this goes towards the fixed costs such as installments while another 20-25 per cent goes towards variable costs like fuel.

"Thus the driver's take-home income is around Rs 18-20,000 per month. Since the online cab aggregators started focussing on profitability and reduced the incentives, the take-home incomes of the drivers have dropped drastically. But they still continue to earn higher than the offline counterparts, who earn about 15-18,000 a month," Redsheer said.