by Apurva Venkat and Shashidhar KJ
“I used to earn around Rs 5000 to Rs 6000 (per day) now I earn Rs 1700 maximum. My income has reduced drastically, actually I have no income at all. I have not paid four EMIs on my car,” says Shankar Mishra, an Uber driver in the Delhi NCR region.
In the recent spate of protests against online cab aggregators, specifically Uber and Ola, drivers have been demanding better incentive structures as their earnings have started falling. The drivers say that they are not able to make their ends meet or pay EMIs for their car loans. In February, we saw the first instance where an Ola driver tried to kill himself by consuming poison in a strike in Bangalore.
“The bank has said it will seize my car. I have said ‘ok seize it’. What else can I do, I have no money. I have to die this way or that way. What will happen, they will take my car, put a case on me, I will go to jail. It’s ok, instead of dying here I will die in jail. Death is the only way ahead if there is no improvement in the situation immediately,” Mishra added.
MediaNama has obtained and reviewed over 20 call recordings with executives and drivers over the last two weeks where the common theme has been the reduced earnings of the drivers. We also spoke to seven drivers across Delhi-NCR region, Mumbai, and Bangalore where they described a dire situation and said that many were contemplating suicide. MediaNama also sent detailed questionnaires to Ola and Uber asking about the fall in driver income. Ola still has not replied at the time of publishing.
In 2016 and 2015, Uber and Ola drivers were lured with monthly earnings of Rs 85,000 and Rs 70,000. The driver recordings and interviews show that drivers are now earning around Rs 1,700 per day and they say that this barely covers the cost of fuel and servicing of their cars. If a driver earns Rs 1700 a day for 30 days, his income is Rs 51,000. Their monthly loan EMI ranges between Rs 11,000 to Rs 16,000. Their car maintenance and fuel set them back by at least Rs 500 to Rs 700 each day. Even taking Rs 500 as an average, their monthly expenditure for this comes to Rs 15,000. Drivers say that the cab aggregators take a cut of almost 30% (20% commission plus taxes including VAT) on Rs 1700 which comes to Rs 340 each day.
A screenshot of the earnings a driver makes. Sent in by one of the drivers we spoke to.Note that Uber in its reply says that charges a fixed standard service fee of 20% for all rides on the platform in India, irrespective of the city or the type of vehicle chosen by the rider. However, Uber admitted that it is “experimenting” with different incentive schemes for drivers. “Having said that, our idea is to ensure we help driver partners improve their organic earnings as we move forward in our journey from being a startup to a sustainable business,” an Uber spokesperson said in an email reply. Ola did not respond to question of falling driver incomes.
But Uber’s experiments are getting on driver’s nerves. “We are sent messages explaining new schemes every two days. The message makes a driver feel like now maybe we can earn more but when we do everything mentioned and still do not get the BOOST we realize all this is a scam,” said Pritam Raj (name changed), a driver who operates in Delhi and Haryana he added. “So we call the Uber care and they are not very helpful,” he added.
A driver MediaNama spoke with yesterday said that there was no incentive, and no BOOST in Delhi yesterday. “When I had initially joined this field, a year and half ago, I thought I would drive for 3-4 months, and then get my own car. Very soon I realised that this is not going to last, and now I work for car owners.”
[soundcloud url=”https://api.soundcloud.com/tracks/327241095″ params=”color=ff5500&auto_play=false&hide_related=false&show_comments=true&show_user=true&show_reposts=false” width=”100%” height=”166″ iframe=”true” /]
Uber’s BOOST programme
Driver recordings also described an incentive structure called BOOST where Uber’s executives tell drivers to go to areas where there is surge pricing. Uber confirmed this to MediaNama in an email:
“When the demand for rides supersedes the number of cars available on the road, riders see dynamic pricing kicking in and drivers on their app see the areas in the city that have high demand. In such situations, dynamic pricing helps us incentivise drivers to get their cars out on the roads to address the increased demand. In the process, we are able to not just predict demand and supply but also bring down the wait times for riders, increase earnings for our driver partners over that period and then eventually bring down the prices (and normalize earnings) once again soon as supply meets demand. These are all algorithm based calculations and just like riders are charged an upfront fare, drivers too are able to see exact details of their earnings on their app.”
Uber said that the service fee in the BOOST structure remains the same but declined to answer specific queries about discrepancies in payments to drivers. Multiple drivers told MediaNama that in most cases, the BOOST is typically 10% to 20% increment to the regular payment (1.1x to 1.2x), and they often have to travel long distances to get to the BOOST area, with no guarantee of a passenger. “Who pays for the fuel when we’re going to a BOOST area?” a driver asked us, rhetorically.
However, Pritam elaborated that the BOOST programme also adds inordinate pressure to keep up their acceptance rate: “The (BOOST) schemes say there should be 90% acceptance of rides, zero cancellations. So even if I have done 9 out of 10 rides, not accepting the last one will make my whole day go waste. I will have to do four more rides to bring it back to that 90 or 100%.”
Ola’s Driver Denied Duty
Meanwhile, Ola drivers said that their earnings are further being eaten into by a cut called Driver Denied Duty. A call recording sent in by a driver described a heated argument where a driver was arguing with an Ola executive about the Driver Denied Duty being levied on him despite the cancellation request coming from the customer. In the recording, the driver explained that the customer called and asked him to cancel the ride as he was unable to catch a data signal. However, the Ola executive said that this was not recognized by the system and levied the cut and that there was nothing they could do to reverse the same.
Another driver from Banglore who chose to be only identified as Ravi confirmed to MediaNama about the charge. “It was Rs 500 but recently has been reduced to Rs 250. So suddenly one month my earning was Rs 50,000 then Rs 40,000 and then it just kept going lower,” he said. “If a customer puts a wrong location and we cancel we are charged. The company should ask us right before charging.” he added. Ola did not respond to queries about the Driver Denied Duty charge.
Ravi added that he participated in the protests against Ola and Uber in February but said that his income took a beating during that time. “I participated in recent strikes also but what happened was I lost those many days of money,” he said. ”
Ola has not responded to queries about the driver denied duty and how it is being imposed on drivers.
[soundcloud url=”https://api.soundcloud.com/tracks/327241094″ params=”color=ff5500&auto_play=false&hide_related=false&show_comments=true&show_user=true&show_reposts=false” width=”100%” height=”166″ iframe=”true” /]
Cars are being seized
Tanveer Pasha, President of Ola, Taxiforsure and Uber drivers and Owners Association, says that around 8,000 to 10,000 vehicles have been in seized in the last 3 months in Bangalore. Earlier this month, it was reported that State Bank of India (SBI) seized 300 cars which were operating as taxis for Ola and Uber. SBI has also stopped lending to customers who wish to become drivers for Ola and Uber in select cities.
Meanwhile, Sahdev Panchal president of SEWA Cabs (the service which was launched by a cab union in Delhi in protest against Ola and Uber) says that 3,000 cabs have been seized in the Delhi-NCR region in the last month.
When we queried Uber about what the company is doing to mitigate the situation with lenders as drivers took loans for cars based on the previous incentive structure, a spokesperson said: “This is factually incorrect. The future of our business depends on making driving with Uber the most attractive choice. Given the strong demand from riders, we are seeing sustainable earning opportunities for driver partners and are committed to supporting them. We are constantly working with lenders to find terms most attractive for driver partners.” Ola did not respond to this question.
“What difference does it make to them?” a driver asked us. Every day, 30-40 new drivers are joining the platforms, and there are over 150,000 cars in Delhi alone, he added. One or two leaving makes no difference to them [Uber and Ola]. Even when there are protests, how long will they last? “I sat in the protests for 3-4 days, but who can afford to stay on strike for 10 days?” This driver said he would never take a car of his own on debt, because, in his words, it becomes bonded labour. The companies can change plans and policies whenever they want, and drivers cant quit.
Drivers contemplating suicide
However, Deepak Kumar (name changed) had a different story to tell. “When I was earning well, I have not defaulted even a single payment. Now there are no rides from the company and no help, don’t even ask about money. What do I do?,” he told MediaNama on a call. Kumar, who has two daughters and a son, said that when he first started driving for Uber he used to earn around Rs 4000 each day but now earns Rs 700 to Rs 800 out of which Rs 500 goes of for diesel. “For now, I am trying to collect money for my wife’s operation and arranging at least two meals each day for my three kids. That’s all I can think off,” he added.
Kumar also sent a call recording to MediaNama where he is talking to an Uber executive about his situation angrily and threatens to commit suicide to which the executive replies ‘“incentive policy won’t change.”
MediaNama asked Uber if they had counselling sessions for drivers and said that they “have always been engaging with our driver partners, both on a one-on-one basis and more recently through community-based initiatives like UberSAMAJ, spearheaded by senior leadership team members at Uber.” “Through these platforms, we encourage driver partners to share their concerns and work closely with them in finding a mutually agreeable solution,” the company said in an email. Ola has not responded to this question.
Meanwhile, Manish Agarwal (name changed), a driver associated with Ola and Uber and who also employs other drivers as well, said that his drivers drive for more than 15-16 hours a day. He added that this is taking a toll on them. Agarwal said that he is in a better situation to repay loans but worries about other drivers.
“I am well off but what about those drivers who have no other backups, who have sold jewellery, property to take these loans. I talk to drivers daily who say we are just trying to figure out a way to commit suicide. Many have said that they will write a letter blaming the companies before committing suicide. Can you imagine the state they are in that they say they are thinking of ways to commit suicide,” he said.
“So whenever I get a call for someone seeking help we rush to the place simply to make sure that no driver dies,” Agarwal added.
IMPORTANT: If any of you talk to a driver who might be contemplating suicide, please share details of the following suicide helplines: link
Drivers are not logging in
With lower incentives and increased targets, many drivers are not logging into the Ola and Uber app. Panchal estimates that there are around 700 drivers in the Delhi-NCR region who are not logging in every day. “Officially, no one has left the company. This is because they are scared that there will be issues with the bank or created by Ola and Uber. See when we take loans there is form that is called a template form that we need to fill that basically says we are taking the loan to ride with Ola or Uber. Now drivers are scared that if they leave then the bank will take the cars away. So what they do is just don’t log in,” Panchal said.
Note that Uber says that it around 240,000 active driver partners. They added that they consider a driver active if they have taken at least one ride in a week. The company added that it isn’t seeing a significant churn in the number of drivers. Ola did not comment on how many active drivers it had on its platform.
Panchal explains why they are not seeing a churn at this point. “So they login take a ride or two and log off or they just do not log in that’s all. They feel at least the car is there.They have gone back to other jobs but not officially left Ola or Uber. They have been cheated so bad there is no trust left,” he explained.
Questions asked to Ola
1. Drivers say that their income has fallen sharply to around Rs 1700 a day with changes in the incentive structure. Could you confirm that the average income of an Ola driver is Rs 1700? What is the current incentive structure?
2. Drivers also complained that their earnings are being cut by a Rs 250 Driver Denied Duty charge even when the customer initiates a cancellation. Could you confirm whether an Ola driver has to bear the Driver Denied Duty charge? How does Ola determine when a driver gets a DD charge?
3. Drivers also described to us about a charge known as non-peak cut, an additional commission that Ola adds. Could we get a confirmation on the same? How does this work?
4. How does Ola decide how the percentage for the non-peak cut. What is the reason for this and was this informed to the drivers beforehand?
5. What is the average number of trips a driver takes now per day. What was the average in 2015 and 2016? How many hours are drivers working now as compared to 2015 and 2016?
6. How many active driver partners are there in Ola currently? How many drivers have left the Ola platform?
7. Most Ola drivers are in a debt trap currently. We understand that at least 10,000 cabs have been seized because of non-payment of EMIs. Drivers took loans for cars based on the previous incentive structure. With the current incentive structure, drivers are forced to take more loans to make ends meet. What is Ola doing to mitigate this? Is Ola talking to lenders to help with restructuring their loans?
8. Conversations with drivers say that their debt situation is untenable and will commit suicide if the situation continues. We already saw an incident where an Ola driver tried to commit suicide? Is Ola planning to have counselling sessions for drivers in this regard? Did Ola reach out to help Mohan Babu, the driver who tried to take his own life?
Corrigendum: MediaNama has changed the name of a driver mentioned in the story upon request as he is still engaged with the company.