The Uber drivers in India have started to strike against the ride sharing giant to increase their fares and other demands.
The drivers of the ride sharing giant have been agitating in two of the major cities in the country. The drivers in Bengaluru and Delhi are demanding the rides haring giant to increase the fare and provide them with further benefits on the driver platform. The drivers who have participated in the strike are demanding the car sharing company to increase the fare rate from twelve rupees to fifteen rupees for a kilometer. Because for the past one month the car sharing company had increased the price in all the cities to ten percent and also rolled back some of the benefits the company offered to its drivers.
The President of the Sarvodaya Driver Association, Kamalijeet Gill said that the ride sharing company offered incentives to the drivers till the beginning of the year and the drivers were able to earn fifteen rupees for a kilometer, but the company rolled back its incentives and so the rates of the fare per kilometer dropped to Rs.6 or 7 and is not viable since the drivers had to pay commission to the company that was about 20% to 25%. Therefore, even if the drivers had to drive 200km a day, they were unable to make profit. Also, the drivers had to pay the expensive car installments.
The sudden withdrawal of the incentives has impacted greatly in the livelihood of the drivers in managing their family as well as pays the installments.
The ridesharing company’s view
The President of the ridesharing company for South Asia and India, Amit Jain said that the company is ready to meet the drivers and personally deal with the issues relating to them, but will not meet with the driver’s association. The company is planning to move from the startup phase in India into a substantial business and is finding out the correct balance between being economically viable to the drivers and at the same time providing attractive service to the passengers.
The President of the car sharing company stated that the number of Uber cars riding on the roads have increased because of the high demand and that the companies can directly connect with their drivers in explaining about the increased demand in the market and the efficiency that is driven and the various beneficial programs and incentives that are planned by the company.
Unable to fulfill the demand
Establishing its service in the Indian market is a substantial task for the ridesharing service because India is the second largest market for the taxi dispatch company after its market in the United States as twelve percent of the rides for the company are originating from India. And the company is in the plans of taking a long term view in the Indian market and is waiting for it to become a profitable market.
According to the company, the number of drivers joining the organization is because of the wide range of opportunities it gives for the drivers in its platform. The study report released by the ride sharing company shows that about eighty percent of the drivers earn Rs.2500 by working only for six hours a day and the least that they make would by up to Rs.1500 and is an organic combination of revenue from the fares given by the riders and the incentives offered by the ride sharing giant. And this various time to time depending on various factors.
Substantial shift in the business
The ride sharing company shows a substantial increase in the demand for service and stated that the number of downloads of the ride sharing application has increased from 2.9 million from last year to twenty two million this year, the company’s perception is that there are more cars to be addressed while the number of people need to address the demand is less. To help the drivers and meet their demands, the ride sharing company has set up a hub called the Green-light hub- where the drivers can walk into the hub regarding the support or financing or other services. The Green-light hub is located in three cities in Gurgaon, Delhi and Noida.
Though it has been 3 and a half years for the ride sharing company since it came to India, it has not yet opened its account in the country and are going through the investment phase. After facing many business strategies and local government issues, the United Kingdom and Australia are the profitable market for the company.
There are chances for the company to focus on incentive target model to the drivers depending on the supply and demand, but this strategy has the chance of resulting in an unrest situation among the drivers over the trips they complete on a day and the number of hours they have to spend on the streets to earn the incentive amounts. And there are chances for zero incentive or lower incentives for the drivers depending on the range of demands.
Tough time for the taxi aggregator
This year was not a cakewalk for the ridesharing operator because it faced several controversies right from the beginning of the year. The issue started with the one of its feature, the UberPool that was banned in Karnataka along with the Ola Share service – where the riders can share their trip when they are travelling in the same direction. Followed by this is the drivers’ strike in three major cities, Delhi, Hyderabad and Bengaluru over the incentive issue and the sexism issue in the company that was worsen by asking the SVP of the engineering department to step down and finally the video that is viral in the internet, where the company’s CEO is seen arguing with one of the drivers.
When speaking about the incentives, the President of the ride sharing company said that it varies according to the individual and is dynamic business model. The company is constantly in the process of analyzing the business model to understand, improve and assess both the incentives and fares. And since the ride sharing service is a 2 sided market, the company must balance both the riders and the drivers. The company can move upwards in the Indian market only if it is able to sustain the market by balancing the needs of the drivers and the riders.
The company is strictly watching the market to make sure that the drivers are not affected by the financial issues because after the recent intimidation and violence, many of the driver partners stopped using the Uber’s driver mobile application. However, the company is able to see a sustainable increase in the market and many driver partners are interested in joining the company and a record shows that there is a steady growth in the number of Uber partners joining the organization and the percentage has increase to sixty percent.
During the strike, only some of the drivers were involved in the strike, while there were many who wished to work for the operator and so, the company took several measures to reach out to those drivers individually. The company used different ways to connect with the drivers like video messages, text and phone calls and even some of the drivers visited the Green light hub to convey their willingness to work with the company.
Author Bio :-
Anand Rajendran is an Innovative entrepreneur and has a lot to say about innovations in all aspects of digital technology and online marketing. He is the Co-Founder and CEO of Zoplay where he has implemented many uber for x ideas with his uber for x scripts.