Decline in income and incentives drives cabbies away from aggregators

In the past three years, nearly 15,000 call taxi drivers attached to two big app-based taxi aggregators — Ola and Uber — have signed off the platforms following a steep fall in their earnings and incentives in the backdrop of surge in fuel prices and mounting debts.

Cab drivers have gone on strike for three times this year. Industry sources reveal that the resentment built up over the years led to the frequent strikes. “The increase in fuel prices and the high commission charged by the aggregators have resulted in huge losses for the drivers. The tariff charged for per kilometre is less than the tariff fixed for autorickshaws. We have requested the corporate firms as well as the State Transport Department to revise the tariff. But nothing concrete has emerged so far,” said B Anbazhagan, general secretary of Chennai Metropolitan Transport Workers Union.

The Transport Unions claim that around 70 drivers had committed suicide in the past few years alone. “Unable to pay the loans that were taken to purchase their vehicle, they took the extreme step. Currently, these firms take a share of about 26 per cent from the amount paid at the end of each trip,” a member of the union said.  

“We made a good profit two years ago when the fuel price was hovering around Rs 65. In today’s situation, a driver has to spend more than Rs 800 for a trip worth Rs 2,000. In addition, we agree to all the requests from the customers, irrespective of locations, as the cancellation costs us dearly,” the member added.

The other major allegation against the aggregators is that they allocate more trips to the tourist taxi groups. “Ola and Uber captured the market early in the city. They gave other small tourist operators a run for their money. Unable to withstand the pressure, they started working under these aggregators as sub-contract groups. These groups are given more number of trips over the independent drivers who are attached to them.”

Fed up with the aggregators, a motley group of drivers started Ottunargal Thozhilalargal Sangam (OTS), hoping to give a stiff competition to Ola and Uber, in the beginning of this year. 

Affiliated to the CITU, the Tamil Nadu Call Taxi Thozhilalargal Sangam, general secretary M Boopathi, said, “The whole business is under huge stress. We tried recreating the business model of big firms. An aggressive marketing will help us reach people but it is economically non-viable. Currently, we are relying on the word-of-mouth publicity to attract more customers.” Ola and Uber together have around 8000 vehicles when compared to their fleet size of more than 30,000 some two years ago. The dwindling numbers are the main reason why customers are not able to find a cab during the peak hours, he added.

Refuting the claim regarding the decrease in number of vehicles, an Ola executive said, “Though, I can’t reveal the exact numbers, we are maintaining a fleet size of around 10,000.” When asked about the high commission that affects the drivers, he said, “The firm has chosen a business model that suited its strategy in the highly competitive field. The drivers voluntarily join us. They are working for other aggregators too. There are drivers who earn up to Rs 40,000 a month. But they are the ones who work harder and for more hours.”

The customers are also not happy with the long wait during peak hours and surge in rates. “The peak hour charges are fixed based upon the demand and supply. There is no problem when there is more supply. But if the supply reduces, the peak hour charges are imposed to tackle the situation. There are commuters who are willing to pay extra instead of waiting for a cab. It is a privilege given to those consumers,” the executed said. It is a perennial problem in our business. May be a few areas in the city would be facing such a situation, he added.

The State Transport Department had convened a meeting between prominent cab operators and transport unions to find an amicable solution for the problems last month. However, the authorities said that they could do only a little as the bill regarding the matter was pending in the Parliament.

The State Transport Commissioner, C Samayamoorthy, said, “The Motor Vehicles (Amendment) Bill, 2016, is pending before the parliament. The government cannot intervene without having a law in place. Till then, we will help the two parties to find an amicable solution by providing a common platform.” 

“During the meeting last week, the drivers placed two demands before us – revision of fares and reducing the commission. We are working on both the issues,” said the Uber official.

An executive of Ola noted that the firm has mailed the revised fare list to the State Transport Department for its consideration. “We have increased the fares of vehicles plying under the mini category from Rs 6 to Rs 8. The drivers know that several components are added to the total fare, aiming to bring down the losses that are incurred by plying at a nominal rate,” the executive remarked.