In 2014, M. Yusuf became the proud owner of a brand new sedan. It was to be the chariot that would lead him down the road to success and big money in a city where signing up with app-based taxi aggregators was all the rage. A little more than three years later, his sedan — no matter how often he cleans it — reflects its owner’s broken dreams.
When Yusuf (32), who quit his job as a driver with a radio taxi company, signed up with an app aggregator in Bengaluru and a loan for a car, he was drawn to the promise of earning lakhs of rupees in a year.
“The first year was the best. I was drawing in ₹70,000-80,000 a month. I was the one convincing all my friends to upgrade their cars and opt for sedans as they could pay off their loans very easily,” said Yusuf.
Swift decline
In the second year, his bubble did not burst but slowly started to shrink.
“The money started decreasing, but the loans remained the same,” he said. “Now the situation has become a nightmare.”
With a glut in drivers, an increase in commissions that drivers have to pay the aggregators, and the Karnataka government’s attempts to rein in this sector, people like Yusuf, who were earning tens of thousands of rupees are seeing their incomes halved.
“I am trapped. To earn the same amount now, I have to work more than 14 hours a day. I don’t have the option of giving up my car. How can I begin from scratch again?”
The last two years have been a steady downward spiral for thousands like Yusuf, who signed up with taxi aggregators like Ola and Uber earlier. With the number of protests over the past one year, some against the government and some against the companies themselves, the glitter of app-based aggregators has definitely lost its sheen.
Since the start of the year, Bengaluru has seen regular protests by disgruntled drivers trying to highlight what they believe are unfair practices by the companies. At the top of their list of demands is the fixing of fares by the aggregators to ensure that earnings are protected. The drivers are also demanding a reduction in commissions charged, which drivers allege have increased to 25% from 10%.
But with the State government caught in a legal war with the aggregators over regulations, these protests are not garnering much sympathy. “We have met the Transport Department officials several times but they say they cannot help us. We have also been told that if the fares lowered even further, there can be no action taken against the companies,” said Tanveer Pasha, who represents one of the unions demanding action against aggregators.
Government backs off
The Karnataka government, which was at the forefront of attempts to regulate the aggregators when they initially launched their services, seems to have lost the plot midway. Over the last two years, the Transport Department has tried to bring in aggregators under a specific set of rules that would govern surge pricing, ride sharing and bike-taxi services, but has met with little success.
For the authorities, this winter of discontent is a private matter between drivers and the aggregators. Officials say they cannot intervene on the issue of low fares. “These low fares benefit customers. How can we intervene? When we tried to regulate the aggregators, these drivers protested, demanding that we let them ply. Now, as things are turning sour, they are asking us to step in. We cannot do that as it is a matter for the employer and employee,” said a senior transport department official on condition of anonymity.
At the heart of the problem is the fact that the first wave of drivers who flocked to aggregators had no inkling of the business model they were adopting.
“So, many of us thought this was the end to struggling to find customers as we had an app that would get us bookings,” said Syed M, a driver with Uber.
One of the many stringent conditions the drivers are locked into are the targets — the number of rides to be clocked by drivers to claim their daily bonus. These have been hiked by aggregators, making it impossible to achieve unless the drivers exceed the government-mandated hours of work, Mr. Syed claims.
“The government can step in to educate drivers about how these kind of business models work. A certain amount of education can be provided to help them protect poor families from risks they cannot manage,” said Ashwin Mahesh, an urban mobility expert.
While the first batch of drivers are struggling, there is another group that is managing to make a comfortable living. Ola, for instance, offers schemes that allow drivers to pay a small down payment of around ₹35,000 for cars owned by the company in return for a daily fee.
“We have to pay around ₹1,050 a day and we get to keep the remaining fare. Staying logged in for around 12 hours a day, I make around ₹3,000 a day as we get bookings on priority,” said Sudhakar, a beneficiary of the scheme.
These drivers do not have to pay any commission to the firm. Additionally, they also get to keep the car if they drive it for four years. This business model has irked the earlier batch of drivers. “They are given bookings on priority while those of us who bought our own cars are left to fend for ourselves. Is it our fault that we signed up first?” asked an irate Ravi, who drives for Ola.
Others point out that the total money paid by the drivers for four years would be more than the actual cost of the car depending on the model. “It is a major commitment they have signed on for. When there is no guarantee on what the next six months will hold, they have agreed to pay a daily amount for four years,” said another driver who did not want to be named.
In the coming days, protests by drivers are expected to intensify. On Thursday, two drivers attempted suicide to gain the attention of the Transport Department and the companies. However, with more than one lakh taxis plying for aggregators in Bengaluru alone, and a new wave of drivers desperate for jobs even if they don’t hit a lakh a month, this fight may be a long-drawn effort.
Neither Ola nor Uber responded to The Hindu’s repeated queries on the issue.
