I’m a fairly heavy user of Ola Cabs and Uber; I really like their service, and often feel that they are currently under pricing and making a loss to gain a lead on each other in the taxi aggregator business.
This is a very interesting business where Ola or Uber don’t own taxis on their own, but partner with other individuals who own taxis and register with them.
You can hail a taxi using their app, and the taxi drivers logged into the app get a request that they can accept and come and get you. You can load the Ola app with money using your credit card so you don’t have the hassle of using cash to pay the driver. Uber allows you to link the account to Paytm and avoids the hassle.
Uber is a San Francisco based company which was recently valued at over $40 billion dollars and Ola is a home grown company based out of Mumbai which is estimated to have a staggering valuation of over $2.5 billion (Rs. 15,000 crores). This valuation is very recent as it just took funding of about $400 million a couple of weeks ago.
Although the latest round of funding gives them a very high valuation; that they were doing so well is nothing new because this is not the first time they have gotten funding, and earlier this year they had reported that they are doing about 200,000 rides per day.
So, the company is doing well (as least in terms of valuation), it’s a good service for customers, but I often wondered how the taxi drivers fared?
On a recent trip to Delhi, I used Taxi For Sure, which is a similar service, and has been recently acquired by Ola Cabs, and the man driving the taxi told me that he was actually the owner of a fleet of cars but his drivers made more money than him on a regular basis due to the salaries Ola and Uber pay.
I didn’t really take him seriously but this article today in the ET about Ola Drivers protesting a pay cut caught my attention due to that conversation. Apparently, Ola has an agreement of paying Rs. 38,000 per month to hatchback drivers, and Rs. 46,000 per month to sedan drivers, but they want to cut that by Rs. 8,000 and increase the working hours for the sedan drivers. The drivers are protesting and rightly so because this was not in their contracts and no company should be allowed to change the rules like this.
I don’t know the details of the contract but I certainly hope that the company doesn’t get away with any high handedness like this. It will be a shame if that happens because this is a great service for everyone involved, and it is very heart warming to see that a start up has created such great livelihood opportunities for so many people who till only a few years ago could have never dreamed of owning their own small business.