R. Dinakaran , heads the Internet edition of The Hindu Business Line and writes on technology and social media.

R Dinakaran

Ola and Uber: Time for transparency?

| Updated on March 09, 2018


A few years ago, who would have thought we will have the power to hail a cab from our mobile sitting at home - without even talking to a human? All it requires are a few clicks and a cab is ready to pick up and drop at our destination.

It is true that cab aggregators like Uber and Ola have changed the way we commute. We may like or hate them, but the fact is that they have come to stay. The ease of the cab ride also brings with it associated problems like rouge drivers and surge pricing.

Both the Central and State Governments don't seem to have a clue on how to regulate Ola and Uber. When the Governments came down on surge pricing, all Ola and Uber did was to remove the word surge. Now there is a talk of having a cap on surge pricing. Will an over-enthusiastic government destroy these companies with over-regulation? Even with all the faults, we have got used to the new form of commuting. And any hare-brained move may only put an end to the ease with which we commute.

Even as customers fret and fume about the fares, the drivers too are divided on how 'their company' treats them.

Uber and Ola have different ways of providing incentives to drivers. While Ola gives trip-based incentives, Uber's incentives are based on the fares. (Uber too had trip-based incentives, but has now moved to a cash-based one.) An Ola driver lamented that the company was mistreating them and was delaying the credit of their earnings to their account. But another driver was all praise for Ola. The company was prompt in crediting earnings to their accounts, he said. He said he made it a point to finish 17 trips a day (the highest slab for incentives) and that he earned enough and more.

Both Ola and Uber drivers were quick to find a loophole in the trip-based incentive system. They would book multiple trips among themselves using different mobiles. They also got into the habit of asking customers to book a dummy trip (using cash payment). They would go for a short distance and close the trip. Though they got nothing for the trip, they would make it up with the incentive. This happens even now with Ola.

Says Balaraman, one of the users, in his blog post: "Also, I’ve heard about auto drivers misusing Ola by booking dummy ride from another mobile and making empty rides without passenger as a ride with incentive. I’ve myself seen cab drivers asking me to book another ride from another account at the end of my first ride. They wanted me to involve in their fake rides. I will straightaway reject them and give poor rating for them."

There were those who accepted trips from customers, but commenced the trips without the customer. They would go on a short ride and close the trip, so that they were able to meet the day's target. And not all customers knew how to complain. "For every ten customers cheated, five have no clue on how to make a complaint," a driver said.

One of the main contentions is the Ola Money, Ola's wallet. One driver said he preferred cash instead of Ola Money. If all customers preferred to pay through Ola Money, he would be left with no cash for diesel. And Ola Money payments took time to get credited to his account - sometimes more than a week.

But another driver said had no issues with Ola Money. Not all customers used the wallet. Many preferred to give cash, and Ola was also quick to credit his Ola Money earnings, he said. "Only those drivers who were trying to make a quick buck by exploiting the loopholes are not happy," he said.

There are customers who have been taken for a ride by drivers. A customer who had booked a cab got a call from the driver asking him whether he would be paying through wallet or cash. Once the customer said it would be through wallet, the driver cut the call. Within seconds, the customer's app showed the trip had commenced, while he was still waiting for the cab. The driver did not pick up his calls, and the customer was not able to cancel the trip too, as the trip had "commenced". Even Ola Auto customers were at the receiving end of this scam.

I am not sure whether the incident was with Uber or Ola, but at least Ola has made it mandatory for the driver to fill in the CRN number with the customer. This has reduced the fake trips, in Ola, but not in Uber.

Even today, one of my colleagues was a victim of a fake trip by an Uber driver. But fortunately, he had opted for cash payment instead of PayTM or other wallets. At least in Uber, you can switch the payment mode while on a trip. If your default payment mode is PayTM or Airtel Money, you can switch to cash midway in a trip, so that if the cab is on a fake trip without you, you can at least prevent the automatic deduction from the wallet.

But as my colleague found out, there was no way to abort a fake trip or to contact customer care, as Uber does not have a customer care phone number. The only way out for my colleague was to activate the SOS mode. There were two options - customer care and police. He chose customer care. The executive said she was helpless. There was nothing she could do. And there was nothing the customer could do - till the trip ended!

Upfront rates

After the clampdown on surge pricing, the cab aggregators have come out with a new method that is not at all transparent, though it appears to be so. Some riders allege it is almost a scam.

First, the upfront pricing does not indicate whether the rates include surge pricing. Not many know that both Uber and Ola still have surge pricing (or whatever they call it). The surge amount is built into the upfront rates shown to the customer. Not many customers are aware of it. Occasionally, there is only a line in small print that says the rates are higher "because of increased demand" or something to that effect.

Srikanth, a frequent cab user did some analysis and found there were several things wrong with the 'upfront pricing'. In his blog post, he says:

"The upfront pricing fares are final, irrespective of the actual distance / time taken to reach the destination. But, if it takes longer / more km than the original estimate (the exact address might be a km away), you will be charged “actual” charge which would be slightly more than the upfront estimate depending on the extra miles / extra ride time. But in case you get off en route / reach early because of less traffic, the upfront fares are fixed and Uber pockets it as its profit. Fair enough. But what happens if the estimate goes horribly wrong? When I pointed out exactly (how their system was buggy and estimates were way off), how the estimate was grossly wrong, all I got was a template response."


(From left) Uber Fare estimate for Perungalathur – Express Avenue; Google Maps Navigation from Perungalathur – Express Avenue using Chennai Bypass; Google Maps Navigation from Perungalathur – Express Avenue using GST Road.

Pic courtesy: Srikanth L

What goes wrong with upfront pricing is that the Google Maps used by the Uber shows the "fastest" route, not the shortest one. Srikanth says, "Uber’s upfront pricing went wrong because it chose the “best” (combination of distance + time estimates, Google mostly prefers fastest route even if its few miles extra) route returned by Google Maps. Anyone who has driven in Indian cities know that the navigation ETAs are rarely close to perfection. When multiple routes exist, it is best to ask the person in the signal than trusting the app as to which one would be better route."

Srikanth, who gave an example that showed the Google Map showing a longer (faster) route than the usual (shorter) one, says, "The estimates was using the “best” route by Google maps navigation which was suggesting to travel 6 km more for estimated time saving of 8 minutes.

As Srikanth says in his Tweet : "With @Uber #UpfrontPricing, Taking a ride is entering into a forward contract without the option to negotiate. When transit becomes hedging."

So, in effect, the upfront price you pay may not be the price you will pay if you travel by meter. And no doubt, there is a clamour for meters in these cabs.

Okay, now are the apps perfect? No. The first driver (whom I have quoted above) said frequently the amount paid by the customer and the trip amount received by the driver were different. Though the cab companies adjusted the disputed amount immediately, the excuse given by the companies was "network issue".

The "network issue" is in fact a problem with GPS. Many cab drivers complain that that GPS distance is always less than actual travelled. (Hence drivers allege that they always get paid less). Says a frequent user: "Purely technically, accuracy of GPS depends on device. Accuracy of billing depends on number of GPS points with accuracy and one data point missed can led to a small distance cut. (Imagine a right angle triangle ABC. If the point B is missed while data collection, AB + BC is treated as AC which leads to small distance being taken off calculations. Drivers allege that this small error leads to ~ 1 km in 20 kms.

"The accuracy also is a factor of mobile networks. From a GIS professional, heard TFS had the best app in terms of geo-data collection / billing, but their UX sucked big time. Ola and Uber have fared poorly, although they consistently upgrade these backend systems."

Another frequent customer had this to say, though he was not very sure about it: "There is also another factor hidden in upfront pricing --mining historical decisions of a person to predict the rate a customer is more likely to pay for and ask an appropriate rate. So, when implemented over a large period of time successfully, upfront pricing will tell different rates for 2 different persons standing next to each for same source - destination pairs."

Now, whether it is true or not, I did a test checking the upfront fares over a period of time in a day. Each time, the upfront fares in Uber changed from paise to Re 1 to even more than Rs 50. Was there surge pricing involved? May be for the Rs 50 increase. But what about the 10 paise difference? I am clueless.


The screenshots show variance in fares ranging from Re 1 to over Rs 10 - the time difference is just in minutes.

This is why both Ola and Uber need to be more transparent in their pricing. This will help them gain customer confidence.

With inputs from L. Srikanth and Balaraman Lakshmanan

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Published on September 14, 2016
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