The wheels are turning for Ola, but not for its drivers

SANGEETHA CHENGAPPA Bengaluru | Updated on January 08, 2018

Seeing red Ola drivers are being left in the lurch V SREENIVASA MURTHY   -  V Sreenivasa Murthy

As the taxi-hailing company increases targets, thousands are likely to take up new jobs

Even as Ola Cabs is all set to receive $1.5 billion to $2 billion in funds from various investors, including Softbank and Tencent, it is expected to witness a gradual erosion of its biggest asset – its 8-lakh-plus driver partners – over the next few months.

According to sources, many of its drivers will either go back to call centre jobs or launch their own cab service, as the taxi-hailing company has sharply reduced incentives for drivers, even withdrawing them totally in several cases.

New targets set

Ola driver Srikanth (name changed), who earned incentives of about ₹1,400 after completing a certain number of rides, says it has stopped and what he now receives is just 74 per cent of the total amount per trip, as Ola charges a commission of 26 per cent for every ride completed. Ola has increased targets for driver incentives, making it difficult for drivers like Lakshmikanth, who joined the company a year ago to pay off EMIs of ₹14,000.

“I can make money only if I meet Ola’s target of 8 trips/₹1,400 billing, 11 trips/₹2,000 billing and so on, which is really difficult because Ola favours drivers who buy cars through their financing scheme and directs more trip requests to them, allowing them to meet incentive targets,” he told BusinessLine.

Nearly 10,000 disgruntled drivers of Ola and Uber in Bengaluru are all set to be a part of a new cab aggregator service, which is slated to go live in the city on October 23. The driver app, Namma TYGR, was launched at JD(S) leader H D Kumaraswamy’s residence last month in the presence of cab drivers and union leaders.

“We have started the enrolment process for drivers from Tuesday and are expecting 10,000 drivers to join up in the first phase and many more subsequently. The app for customers will be launched in 20 days,” Tanveer Pasha, former president of Uber, TaxiForSure and Ola (UTO) Drivers and Owners Association, told BusinessLine.

“We have partnered with a Kolkata based start-up, TYGR app, which has a presence in Mumbai, Kolkata, Ranchi and Indore to compete with Ola and Uber. And it will not have any surge pricing or hidden charges and will offer AC mini services at ₹12.50 per km and AC sedan services at ₹14.50 per km,” he said.

RedSeer Consulting, which conducts 5,000 driver surveys a month, says Ola and Uber continue to give incentives payouts but on a much reduced scale.

“Average incentive payouts was over 70 per cent of Gross Booking Volume or money that the customer pays for rides, 12-18 months ago, which has now dropped to 30-35 per cent. But this could rise sharply in new cities where Ola and Uber are building a new driver ecosystem new,” said Mrigank Gutgutia, Engagement Manager at RedSeer Consulting.

“However, cab aggregators continue to tweak incentive schemes in different cities or in pockets of the same city to arrive at a low incentive-high number of rides formula. So it is possible that some drivers are not receiving incentives,” he said.

Published on October 04, 2017

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