oday morning, I booked an Ola Auto from my place to the office. The App showed the ride was three minutes away. I waited more than 15 minutes and did not find him at my location. While tracking, I got to know he hadn’t moved at all from his initial position. So, I gave him a call to know his whereabouts. He told me that his internet pack has finished and that’s why I am unable to track him; he is right below my building. I rushed down and saw there was no Auto. Again I called him and asked his location. He said that his phone is broken and hence, he could not navigate to my location. He gave me his location two minutes away from my gate. Since he was two minutes away, I thought that I would walk up to his location. He still was not there; I cancelled my ride and I was charged for cancelling my booking. In this entire process, I wasted my 40 minutes and got bullied by Ola and the driver both.
Let us take another scenario. If you want to go to Place A from Place B — A is a hugely populated area where the frequency of getting a ride is high and B is being the lesser one. As soon as you book a cab, they (Ola or Uber driver) wouldn’t call or come to your place; instead, they (not all) would wait for the commuter to call them. After that, they would ask for the location where you need to go and after getting to know your location, they would disconnect your call saying that they would be coming. However, they won’t come even after some time and ultimately you have no other option than cancelling the ride. Obviously you can report it to Uber or Ola but if you are going for some urgent work then those 30 minutes waiting period to reach the Customer Executive or Help Desk is a task; even if you succeed in reaching them, they will render an apology for the inconvenience and you have to get ready for another brutal experience.
These Ola drivers are not limited to cheating the clients, they cheat their company too. For example, the cab driver comes to your pick up point. As soon as you get inside the cab, he would ask you to cancel the ride and instead of that, he would ask you to give him the same amount as displayed by the Uber or Ola before booking. And now, if I am in a hurry, I would do the same because I have to reach my destination as soon as possible. This is one example but they have their various ways of cheating people. The irony is that Ola and Uber drivers are demanding guaranteed monthly income of Rs 1.5 lakhs. Engineering, medico or even highly qualified degree holders don’t get this guarantee. They are not reasonable in their demands. Apart from all these, if you look at these cabs, you will find the car interiors dirty as most drivers do not bother to clean it daily. The foul odour is another concern — they do not bother in keeping an air-freshener/fragrance to mask the foul smell. Most of the times, the car A/C does not work, either there is a fault with the A/C or the driver wants to save on fuel cost. Car insides are sometimes infested with mosquitoes as the drivers keep the windows open. Nowadays, many drivers do not use Google Maps navigation while driving; instead, they keep asking the passenger constantly for guiding them in the right direction, which is very much annoying.
The worst of all experiences is this one I had recently — nowadays, most of the drivers are not allowed to cancel customer’s requests more than once or twice, so they employ a nasty and possibly illegal tactics to cancel a customer’s request — what they do is that, as soon as they get your request, they drive for some distance till your pickup point and locate in their phone App that they have already picked you up and then drive away and disappear. Once you realise this and press Cancel, you are charged with Rs 50 cancellation charge, which you have to contact the Customer Support and contest with them to get back.
Moreover, the drivers on behalf of the partners run most of the Ola cabs. These cars are purchased on car loans for business purposes and the owners of the car hardly drive these cars. About 50 per cent of the cars operating in the city is at jeopardy of being seized by the banks and other financial institutions as most of the drivers are not being able to service their debts, which may result in loans defaults. Moreover, in the recently concluded strike by the cab drivers, their demands listed better remuneration and improved working conditions. The drivers alleged that their incomes have reduced drastically with the taxi-hailing firms continuing to acquire more cabs while restructuring the incentive schemes.
With no real regulation on the number of taxis on the roads, their numbers have swelled. When Uber and Ola started their services, they attracted drivers by offering them extraordinarily generous incentives and facilitating loans for cars. Attracted by the charm of owning their taxis and blinded by the incentives, many of the drivers did not question the sustainability of the tariffs they were made to offer nor did they question the longevity of the incentives. Over time, with enough taxis on their Apps, the companies have withdrawn most of the incentives. Some of the drivers will eventually have to stop plying their taxis, dashing their entrepreneurial dreams. Already, some have started defaulting on their loans, prompting some lenders to stop giving new loans to the drivers wanting to buy cars and join the app-based taxi revolution. With the companies they are making losses — then, they are funded by venture capital and expected to make losses. The companies have other problems as well. The companies see their drivers as contractors. The drivers want to be considered employees. This is true in India too; so much for the whole entrepreneurship thing. In the UK, a court has ruled that Uber should recognise its drivers as employees. There are cases on in other parts of the world as well. Recognising drivers as employees would dent the much-vaunted asset-light model of these companies.
However, as the markets matured, systems for holding these companies accountable have become stronger. The cab services are gaining ground, as are pressures on these services to invest in their own infrastructure and comply with local norms. As the costs of these changes addon, the balance sheets of aggregators like Uber and Ola could start looking more and more like those of traditional players, making them potentially undifferentiated and unattractive to the investors. Too big to fail: As mentioned, most aggregators run on very asset-light models. This means someone else owns the infrastructure, the people, the maintenance, the depreciation, the compliance, and the domain expertise. What happens if and when they choose to stop or withdraw from a market? The ecosystem that depends on their demand generation and subsidies could potentially collapse.
(Any suggestions, comments or dispute with regards to this article send us on [email protected])