1. Rough ride for Ola, Uber drivers: Earnings fall 70% on lower incentives & stiff competition

Rough ride for Ola, Uber drivers: Earnings fall 70% on lower incentives & stiff competition

A change in the incentive plan and hard-nosed competition among cabs have resulted in a rougher ride for Ola and Uber drivers.

By: | Updated: May 17, 2016 7:41 AM
ola cab, uber Backed by marquee global investors, both Ola and Uber have been burning significant cash over the past year with ride-linked incentives to drivers in a bid to capture the market and attract more drivers on to the platform.

A change in the incentive plan and hard-nosed competition among cabs have resulted in a rougher ride for Ola and Uber drivers. While last year earnings for many of these drivers crossed Rs 1 lakh a month, this year has seen a slump of over 70% for most.

According to a study by RedSeer, a Bengaluru-based research and consulting firm, earnings of drivers of Ola and Uber with small hatchback cars (Ola Mini, Ola Micro, UberGo) have slumped to Rs 15,000-22,000 a month and R24,000-32-000 for bigger vehicles (Ola Prime and UberX). RedSeer had conducted the study over a period of 10-12 months across 14 cities in the country including Bengaluru, Delhi, Kolkata, Mumbai, Ahmedabad, Jaipur, Indore and Pune.

Currently, Ola pays Rs 3,200 (excluding Ola’s commission and data charges) for 11 rides, Rs 4,800 for 14 rides and Rs 6,200 for 16 rides, while Uber pays Rs 6,600 for 15 rides. Sources said the companies have increased the desired number of daily rides, thereby decreasing the incentive per trip.

Backed by marquee global investors, both Ola and Uber have been burning significant cash over the past year with ride-linked incentives to drivers in a bid to capture the market and attract more drivers on to the platform. India’s online taxi services market is estimated to be around $9 billion, pegged to grow at a CAGR of over 17% during 2015-2020, according to Research and Markets, a US-based market research firm. Ola has closed over $1.3 billion of external funding over the years, while its competitor Uber had last year committed to invest $1 billion in India.

With roughly double the number of driver partners on the platform now, companies have revised the incentive plans and hence earning have reduced drastically. Also, in August 2015, both operators had started levying drivers R300 a week for using their service, attributing it as mobile and internet charges.

“Earlier, for 10 rides I used to earn Rs 5,000 a day (including incentives). However, now I have to take 15 rides to earn the same money and I have to put in 15-18 hours to earn that, which is not possible every day,” said Somashekaraiah, an Ola driver in Bengaluru. However, Somashekaraiah feels he is better off compared to the days before he was associated with Ola. “Today, I do not have to toil hard to get customers. All my sales needs are taken care by the company (Ola),” he said.

Both Ola and Uber were not willing to share the incentive details. However, in its response Ola stated, “What a driver partner earns on the Ola platform is direct functionality of the number of bookings he does, and the high quality of rides he offers to his passengers. Ola provides flexibility to choose their own work timings with no restrictions on minimum number of log-in hours. With the introduction of Ola Micro, drivers have witnessed an increase in revenue as a result of increased number of rides and lower waiting time.”

In May last year, Ola had about 1.6 lakh cabs attached to its platform. In a year’s time it has about 3.5 lakh cabs in 102 cities. Similar is the case with Uber, which had about 1.2 lakh vehicles last May. It now has about 2.5 lakh vehicles on its platform.

“Till last month Uber was fast catching up with Ola. But with the master-stroke around Ola Micro and the discounted pricing, they’ve been able to reverse the trend. For Ola, about 70-80% of the overall bookings comes from Micro and Mini categories,” said RedSeer Consulting CEO Anil Kumar.

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  1. S
    SHANTANU MALIK
    Apr 23, 2017 at 8:59 pm
    My request
    Reply
    1. M
      Mukesh
      Jan 27, 2017 at 5:32 pm
      Ola and Uber still give SMS for investors by a car and earning 1 lack in month . Both companies a big scam with poor drivers now drivers have a big problem by this scam. We want CBI inquiry of both companies because I think both company use big black money . After 8th November both company down incentive very fast .
      Reply
      1. A
        antony
        Jan 6, 2017 at 9:38 am
        Totally now cabs continue ola or uber both is cheating lot of heeding charges not give property duty long time waiting per day only 1000 they give duty I ask lot of time pls give duty but they are telling that is system control total all cab is cheating drivers all very poor he things ok we get money for this but he lost money here even me also driver both drink drivers blood
        Reply
        1. R
          Ravi
          Feb 10, 2017 at 7:20 am
          I am an Ola driver, I am earning 5000 per month in Chandigarh. All the aids are fake now. Gone are the days when ola and uber drivers used to earn 30 to 40 thousands in a month. Now there are approximately 40000 taxies in chandigarh. You can say more than 200 taxies per sector. The drivers are getting 5 duties per day and earning 5000 per month. Thats the truth.
          Reply
          1. S
            Sonu
            Jan 30, 2017 at 4:16 pm
            Digital india ola uber like transparent bussiness
            Reply
            1. P
              Pradeep Kumar from State Bank of Mysore
              Sep 29, 2016 at 11:35 am
              ola is cheating even complete the rides they put the invalid tag and dont tell what is invalid and not given mbg ...fraud company..
              Reply
              1. R
                Rk
                Sep 28, 2016 at 11:05 am
                Ola and Uber cheating partners .మొదట్లో సరిపోయే ఇన్సెంటివ్ ola,Uber ఇప్పడు దారుణంగా మోసం చేస్తున్నారు.ఒక్కో రోజు వాళ్ళు ఇచ్చే డబ్బులు డీజిల్ కె సరిపోతున్నాయి....మోసపూరిత ప్రకటనలు ఇస్తూ చీట్ చేస్తున్నారు.కొత్తగా క్యాబ్ తీసుకొనేవారు....పాత బిజినెస్ ను దృష్టిలో పెట్టుకొని ఇందులో అడుగు పెట్టకండి....బాగా ఆలోచన చేయండి
                Reply
                1. A
                  Ajay
                  Sep 10, 2016 at 8:14 am
                  Uber has gone one step further and introduced fare based MBG which are impractical and near to impossible to achieve. even 16 hr login 2300 fare is not possible to acheive. Cunning and shrewd business strategies by both ola and uber. Drivers suffer :(
                  Reply
                  1. S
                    shankar
                    Oct 13, 2016 at 8:11 am
                    Uber and ola only companies operating in the city ..when another company it's comes . That time they gave more incentive. ..other wise no chance. ...
                    Reply
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                      Purushotham
                      Sep 27, 2016 at 5:28 am
                      Harrasing and torture for drivers.these companies are behaving like a hittler.im working above 18hrs/day.but still i cant earn above 15000,ola is refusing incentive without any notice or reason.if some of the driver conduct sucuide due to official and economical reason these companies will responsible for future incidents.
                      Reply
                      1. R
                        Ravi
                        Nov 7, 2016 at 3:54 pm
                        This is the good time to launch a new company in the market as ola and uber is lossing the drivers everyday because of the 0 incentives to them. Gone are the days when OLA and UBER drivers were getting incentives. Now OLA is paying its drivers rupees 00.00 as incentives Plus deducting 20% as commission on each ride. Means a OLA and UBER driver earns hardly 12K per month and its bitter truth. All the big advers that OLA and UBER drivers are earning 45K, 50 K is a history now…
                        Reply
                        1. D
                          devraj
                          Jul 24, 2016 at 7:49 am
                          uber and ola are making fool for drivers now a days, they dont give chance to complete target trips, because now they have some game plan, still if your are online for 14 to 15 hours,
                          Reply
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