Cabs traffic plying under Ola and Uber declined by 25% during Jan-March’17

Ola and Uber, the two largest ride hailing firms operating in the country, recorded 25% q-o-q reduction in the number of vehicles affiliated to their platforms during Jan-March period. The number of cabs operating under the brands reduced to 380,000, compared to a high of 500,000 last year. The reduction is primarily due to a fall in incentives for drivers, prompting them to either explore other driving jobs or quit entirely. As specified by the report, “This trend was precipitated largely by continuously dropping incentives and driver incomes. Drivers who left the online platforms either shifted into other (offline) driving jobs or changed professions entirely”.

The companies have been battling scores of strikes from the drivers for flawed incentive structure and increasing working hours. Amit Jain, Uber India’s president, said that “There is this mix between organic and incentives. Incentives might have come down, but what a driver partner takes home is organic money plus incentives. When we go into a market, the reason we offer incentives is because the rider will not take a ride if there is no driver partner available. For a driver partner to be available when the demand is not there or just picking up, he or she must make sustainable earnings then. You must have an initial set of supply. Over time, when demand catches up, the organic earnings become sustainable for a driver partner”.