Citing that 10% commission cap is not financially sustainable, taxi aggregator Uber is contemplating to limit auto services in selected parts of Bengaluru where the service is viable.
In a statement, Nitish Bhushan, head of Central Operations of Uber in India and South Asia, said: “If our costs cannot be covered through commissions, we will have to find ways to offload costs that could impact the experience of drivers and riders. In the face of these commission caps, we may have to make the difficult decision to limit Uber Auto to select parts of Bengaluru where the service is viable. This will hurt drivers and inconvenience riders who depend on aggregators for their commuting needs.”
It can be recalled that the State government recently banned the operations of auto services by the mobile app based aggregators after receiving complaints about fleecing passengers by charging exorbitant fares. The order was challenged by the aggregators in the Karnataka High Court. Later, the aggregators were allowed to charge 10% on the fare collected (as per the fares fixed by the Transport Department) as commission.
Meanwhile, the department also conducted consensus meetings with various stakeholders as per directions of the court to resolve the issue. In the last meeting, the aggregators had demanded an increase of fare by 25%.
Mr. Bhushan said that in Bengaluru, every month, over 10 lakh residents use Uber Auto to get around their city. They are served by over 50,000 auto drivers. He maintained that the current fixed metered fare does not adequately compensate drivers for the additional distance traveled and time spent in picking up a passenger from their doorstep. “The data is already pointing towards this. Since removing the doorstep compensation, cancellations have increased by over 50% in the city, as availability reduces and drivers turn down trips that are not economically viable for them,” Mr. Bhushan claimed.
