Termination of incentives affects the revenue of Uber and Ola drivers

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Ola is the online transportation company that grown up in India and it is the trade name of ANI Technologies Private Limited. It was initially started as online taxi aggregator in Mumbai and later made their headquarters in Bangalore. It consists of more than three lakhs of cabs in more than hundred cities that includes Delhi, Bangalore, Mumbai, Chennai, Jaipur, Hyderabad, Ahmedabad, Kolkata and more.

Uber Technologies is another popular ride hailing app that has its headquarters in San Francisco, California and operates in 545 towns across the world. The user can request the taxi or food delivery by using the Uber mobile site or Uber mobile application. The drivers of this Uber can use their own cars and they can also use rental cars for the ride.

Facilities provided to drivers

The payment structures of Ola and Uber are different where Uber paid according to the number of kilometers covered and Ola pays for a number of trips. When these two companies initialized their operations, many drivers were eagerly registered with the taxi aggregators and most of them were registered on both the sites. Ola contains four lakhs of drivers and Uber has two lakhs drivers.

Both of the companies provide easy ways to buy cars, gave medical insurance and making the partnership with the lenders for effortless financing. In order to increase the number of driver entrepreneurs, Uber has joined with the governments. Ola has a special scheme called Gurukul scheme that provides help for the education of driver’s children. The main reason for choosing to be the Uber or Ola drivers is the flexible working hours that attracted many drivers.

Incentive schemes of Ola and Uber

Uber provides the assured incentive of three thousand rupees for every day and it will provide the amount even if the driver did not get any single ride on that day. The Uber drivers will also receive two hundred fifty rupees for each ride which exceeds the actual incentive. This mode of pay helps the company to retain and attract more drivers towards their company from their rivals.

Ola also provides minimum guarantee to the drivers; they assured four hundred rupees for each trip. If the trip fare was reduced, then the remaining balance would be provided by the company. Uber provides rupees two hundred for every ride, but now there was a change in this incentive scheme.

Changes in the incentives

Recently, both the ride hailing apps, Ola and Uber have stopped giving incentives to their drivers, which they used to provide earlier at the end of each day. These incentives are playing the crucial factor to expand its business in the country and it also attracts many drivers to sign up into the apps.

Both Uber and Ola offer very low fares to the commuters, so they gained more popularity than the traditional taxi services. To increase the number of drivers, the companies have introduced the incentive schemes and the incentives will be provided with respect to the number of trips travelled or the measure of the distance they completed during off-peak and peak hours. By this incentive schemes, the drivers are earning more than the income came from running the cabs.

Strike broken out

The elimination of incentives to the Uber and Ola drivers has resulted in the broke out of the strike at various cities in India. About five thousand drivers of Uber and Ola have protested at Delhi because of the cancellation of incentives from these online taxi platforms. These companies were stopped providing inducements to their drivers for last two month.

The drivers are suffered a lot because of this move and they have complained that this action has a severe adverse effect on their revenue. Some drivers told that they have earned about three thousand per day, but now the income was reduced to half or even less than that.

The driver of Uber will get rupees two thousand and four hundred rupees for four rides during the peak hours in the initial stage. For six hours, the driver can get rupees three thousand and for eight hours rupees three thousand and five hundred and it is rupees four thousand and five hundred for ten hours.

The monthly income of the drivers have also dropped from rupees sixty thousand to twenty thousand approximately and it was reported that a driver has to work for more than sixteen hours a day to make rupees one thousand and five hundred, which they used to earn at eight hours before.

Reasons for the strike

The strike has broken out at various metropolitan cities of India like Hyderabad, Delhi, and Bangalore because of the suspension of incentives to the drivers of Uber and Ola. The drivers are accused that the both Uber and Ola providing more cab bookings to the cars provided by the leasing ventures Xchange Leasing India Private Limited and Ola Fleet Technologies Private Limited respectively. This leads to great loss to the drivers who possess own cars.

The companies reduced the incentives because of the increase in the number of drivers on both the companies. Hence, the demand for a driver is decreased and also reduces the income. Many drivers claimed that they are unable to meet the targets to obtain incentive and even if they are running cars for more hours, their revenue is much lesser than the earnings of a traditional taxi driver.

The rail hailing apps offers a ride at the base fare of six rupees for one kilometer that is highly reduced fare than the traditional taxi services which offers service at sixteen rupees per kilometer. The drivers have requested the companies to terminate the process of adding more new cars for cab bookings and provide medical insurance to the drivers in case of any accidents.

The drivers should not be provided with a penalty for the cancellation of rides and other fake rides because the driver does not have any connection with the cancellation. Both Ola and Uber have faced many issues from their respective drivers to increase the pay structure; hence the companies must maintain a balance with their drivers and customers to have an uninterrupted business in the country.

 

Anand Rajendran is CEO and Co-Founder of  Dectar apps, best PHP scripts development company located in India. Dectar is a part of Casperon Technologies a leading social and mobile development company which is Developing Taxi Dispatch Software. I’m a Tech geek, Digital marketing expert, Entrepreneur, and Atheist who loves to write everything about PHP Scripts and mobile application development. Cabily Script is a clone of Uber, which developed by the tech gigs of his company.

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