On Monday, my Mumbai roads were at peace as there was no chaos, traffic jams or mess! Just calm roads and right amount of cars were plying on streets. Drivers and car partners of Uber and Ola in Mumbai had called for an indefinite strike to voice their grievances against declining earnings and deteriorating business experience. In fact, close to 60,000 cabs were reportedly off the roads in the city. Mumbai was well placed without these taxi services, when Ola and Uber were not introduced to the city; commuters used to happily travel by whatever mode of transport available. Rather, these car services have made city roads stuck with traffic. I don’t find any reason to resume these taxis back in our lives.
The irony is that, Ola and Uber drivers are demanding guaranteed monthly income of Rs 1.5 lakhs. Engineers, doctors and even highly qualified degree holders do not get this remuneration guarantee. They are not reasonable in their demands. Apart from all this, if you look at these cabs, you will find dirty car interiors as most of the drivers do not bother to keep it clean daily. They do not even bother to keep an air-freshener to mask the foul smell. Most of the times, air conditioners in the cars do not work — either because there are mechanical errors or the driver wants to save the diesel cost. Interior of the car is sometimes infested with mosquitoes as the drivers keep the windows open. Nowadays, many drivers do not use Google Maps navigation while driving and instead they keep on asking the passenger to guide them in the right direction, which is annoying!
Nowadays, most of the drivers are not allowed to cancel customers’ requests more than once or twice, so they employ nasty and illegal tactics to cancel a customer’s request — as soon as they receive passenger’s request, the drivers drive for some distance till your pickup point and intentionally locate the passenger through their phone app notifying that they have already picked the passenger and then they just disappear. Once you realise this and press the cancel button, you have to shell out Rs 50 as a cancellation charge; to claim your money back you have to contact the Customer Support and argue with them.
On the other day, my friend’s grandparents were travelling from Bandra to Churchgate. My friend had booked an Ola cab for them. They boarded the cab and the journey began. The driver noticed that the grandparents were hailing from a small town and not familiar with Mumbai roads. After a while, the driver intimidated them saying that since they were unaware of the direction and also didn’t have smartphones, what they would do if he drove them to some unknown place and robbed them!
Thanks to the grandmother’s presence of mind. She told the driver that she was aware how the cab services work and also knew that her son was tracking the ride. She immediately called her son and cancelled the ride. They even complained to Ola authorities but as usual nothing happened! It’s pathetic to know that innocent people are every day being targeted and exploited. These taxis also come with lots of risk factors while travelling. The navigation can track the route but it cannot prevent a mishap.
Moreover, drivers on behalf of partners run most of the Ola cabs; these cars are purchased by availing loans for business purposes and owners of the cars hardly drive these vehicles. About 50 per cent of the cars operating in the city are on jeopardy of being seized by banks and other financial institutions as most of the drivers are unable to pay their debts, which may result in loan defaults. The drivers on strike demand for better remuneration and improved working conditions; if not fulfilled, the drivers will go on a hunger strike!
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 drivers did not question the sustainability of the tariffs offered to them, nor did they question the longevity of the incentives. Over the time, with enough taxis on their apps, the companies have withdrawn most 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 lending new loans to drivers planning to buy cars and join the app-based taxi revolution.
The companies are facing other problems as well. They view their drivers as contractors but the drivers want to be considered as 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. Cases are being filed in other parts of the world as well. Recognising drivers as employees would affect the much-vaunted asset-light model of these companies. However, as the markets have become 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 add on, the balance sheets of aggregators like Uber and Ola could start looking for more and more like those of traditional players, making them potentially undifferentiated and unattractive to investors. Most aggregators run on very asset-light models — which mean someone else owns the infrastructure, the people, the maintenance, the depreciation, the compliance and the domain expertise. What happens if 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])