Amid consolidation in the ride-hailing and aggregation market with the recent acquisitions of Meru Cabs by Mahindra Logistics and bus service start-up Shuttl and bike rental start-up Vogo by Chalo, it has been tough on cab and bus drivers to sustain their livelihoods. And with the ever-increasing prices of fuel, only 50-55 per cent of the drivers from the pre-Covid period have resumed work across India, according to the Indian Federation of App-based Transport Workers.
Woes galore
With nearly no income, many of the drivers ended up either selling their vehicles or financiers taking them away. For instance, Hyderabad-based cab driver B Kanakaiah had his seven-seater Mahindra Xylo confiscated by the financier after he failed to pay EMIs during the pandemic.
He worked with an IT company, where he would cover around four trips daily in a 12-hour shift, which involved picking up and dropping employees. He found the client through a vendor company that acts as a middleman in exchange of commissions charged from the cab drivers. These vendors also separately have their self-owned fleet of cars.
“Once the IT companies started working remotely, we lost our livelihoods. The client company had promised to pay us for a month, but we never got that money from the vendor. Even after they slowly started returning to work, they needed only 20 per cent of the cars we were servicing them with.
“The vendors took the opportunity and started deploying their own cars. I managed to get my car back a month ago by repaying using our gold jewellery and borrowing another ₹50,000. The financier had kept my car locked in a go-down, which charged an additional ₹5,000,” Kanakaiah told BusinessLine. He added that vendors usually cut ₹500 per trip if they are late to reach the location by 10 minutes or more due to the heavy traffic.
Kanakaiah now works with Ola and Uber and earns a bare minimum, he said.
In a similar situation, Vallabh Sudhakar, who operated two 12-seater wingers in HITEC City Hyderabad, had to look for work elsewhere when the IT sector shut offices to work remotely. He took up temporary driving jobs, but it has been hard to get regular employment. Unable to maintain both his winger cars, he sold one of them months ago.
“Earlier, we could at least manage ₹10,000 a month; now earning ₹2,000 has become a struggle. At present, there are more drivers on road than passengers hailing for rides, and on top of that, high fuel prices.
Salaries halved
Shaik Salauddin, the National General Secretary of Internet Federation of App-Based Transport Workers, pointed out that the selling and confiscation of cars have become common. “The industry has been scattered. Most drivers left this work and returned to their hometowns to take up other jobs like driving tractors or working as labourers.
“Across most cities, if we take an average, only 50-55 per cent of the drivers have gone back to work. Still, there’s hardly any business. Even if they get a few rides in a day, their daily work includes 10 kms or more dry runs amid increased diesel prices. It’s not affordable, yet the cab aggregators did not revise fare charges and continue to take a cut of 25-30 per cent,” said Salauddin.
He added: “You’ll find many drivers asking you if you will be paying in cash and where you would like to go. Sometimes a driver may be planning to go back home and the app appoints him to a faraway route and he ends up driving back 10 kms without a passenger. It’s costly for them. Tourism is not very active yet, and our IT sector client companies are all working from home. Drivers are not able to recover the cost of operations.
“Earlier, drivers could earn around ₹15,000 a month, but now due to lack of passengers and increasing fuel prices, our monthly take home has come down to ₹8,500 on average.”
Slow revival
Faisal Kawoosa, Founder and Chief Analyst, techARC, said that the cab services industry is still looming under the impact of the pandemic and several companies are issuing guidelines on avoiding public transport.
“These markets haven’t bounced back entirely. Uber has been giving discounts, which is self-indicative that they want people to resume using their services, but that hasn’t happened at full swing. It’s not about profits or losses at the moment, the aggregators will be looking at resuming services,” he said.
“Certain corporates and offices have come out with guidelines discouraging employees coming to office to take public transport and cabs to work; only private cars are allowed. Ride-sharing was the norm pre-Covid in most sectors for employees. This is a concern for many organisations who have resumed. The driver community wouldn’t be able to sustain for a longer period without work. They will need to find alternatives.”
However, according to Ola CEO Bhavish Aggarwal, as of August 2021, the second wave in fact saw three times faster recovery in reaching 100 per cent of the GMV levels pre-Covid for OLA. He tweeted in September: “10mn people used Ola for the first time ever in FY21. Welcome guys! As people move, they want to feel safe so they’re switching to personal or shared mobility instead of public transport. Many are moving to Autos taking our Auto business to almost 150% of pre-covid levels.”