Amid the consolidation of the ride-sharing and aggregation market with the recent acquisitions of Meru Cabs by Mahindra Logistics and bus service start-up Shuttl and bicycle rental start-up Vogo by Chalo, it has been difficult for taxi and bus drivers to support themselves. . And with fuel prices steadily rising, only 50-55% of pre-Covid drivers have returned to work across India, according to the App-Based Transport Workers Federation of India.
With virtually no income, many drivers ended up selling their vehicles or having financiers take them away. For example, Hyderabad-based taxi driver B Kanakaiah had his seven-seater Mahindra Xylo confiscated by the financier after failing to pay EMIs during the pandemic.
He worked for an IT company, where he made about four 12-hour trips a day, which involved picking up and dropping off employees. He found the client through a sales company that acts as an intermediary in exchange for commissions charged to taxi drivers. These vendors also separately have their own fleet of cars.
“Once IT companies started working remotely, we lost our livelihoods. The client company had promised to pay us for a month, but we never received this money from the seller. Even after they slowly started going back to work, they only needed 20% of the cars we serviced them with.
“Vendors took the opportunity and started rolling out their own cars. I managed to get my car back a month ago by paying it back with our gold jewelry and borrowing another ₹50,000. The financier had kept my car locked in a breakdown, which charged an additional ₹5,000,” Kanakaiah said.
Activity area. He added that vendors usually discount ₹500 per trip if they are late reaching the location by 10 minutes or more due to heavy traffic.
Kanakaiah now works with Ola and Uber and earns the bare minimum, he said.
In a similar situation, Vallabh Sudhakar, who operated two 12-seater wingers at HITEC City Hyderabad, had to seek work elsewhere when the IT sector shut down its offices to work remotely. He took temporary jobs as a driver, but struggled to find regular employment. Unable to maintain his two winger cars, he sold one of them months ago.
“Previously we could manage at least ₹10,000 per month; earning ₹2000 now has become a struggle. Right now, there are more drivers on the road than passengers coming for rides, and on top of that, high fuel prices.
Salaries cut in half
Shaik Salauddin, National General Secretary of the Internet Federation of App-Based Transport Workers, pointed out that the sale and confiscation of cars has become commonplace. “The industry has been dispersed. Most drivers quit this job and returned to their home towns to take up other jobs, such as driving tractors or working as labourers.
“In most cities, if we take an average, only 50 to 55% of drivers have returned to work. Yet there are hardly any cases. Even though they do a few trips a day, their daily work includes 10 km or more of dry runs amid rising diesel prices. It’s not affordable, but taxi aggregators haven’t revised fares and are still taking a 25-30% discount,” Salauddin said.
He added: “You will find many drivers asking if you will pay cash and where you would like to go. Sometimes a driver might consider going home and the app points him to a distant route and he ends up going 10km without a passenger. It costs them dearly. Tourism is not yet very active and our client companies in the IT sector are all working from home. Drivers are not able to recoup the cost of operations.
“Previously, drivers could earn around ₹15,000 per month, but now due to lack of passengers and rising fuel prices, our monthly income has dropped to ₹8,500 on average.”
Slow wake up
Faisal Kawoosa, Founder and Chief Analyst, techARC, said the taxi service industry is still looming under the impact of the pandemic and several companies are issuing guidelines to avoid public transport.
“Those markets haven’t fully rebounded. Uber has been giving discounts, which indicates they want people to start using their services again, but that hasn’t happened at full throttle. It’s not about profit or loss at this time, aggregators will be looking to resume services,” he said.
“Some companies and offices have issued guidelines discouraging employees from coming to the office to take public transport and taxis to get to work; only private cars are allowed. Carpooling was the pre-Covid norm in most industries for employees. This is a concern for many organizations that have taken over. The driver community would not be able to survive any longer without work. They will have to find alternatives.
However, according to Ola CEO, Bhavish Aggarwal, in August 2021, the second wave actually saw a three times faster recovery reaching 100% of pre-Covid GMV levels for OLA. He tweeted in September: “10 million people used Ola for the very first time in FY21. Welcome Guys! When people move, they want to feel safe and therefore opt for personal or shared mobility instead of public transport. Many are turning to automobiles, bringing our automotive business to almost 150% of pre-crisis levels. »