Why the latest Ola, Uber strike was a disaster waiting to happen and how it will impact you! - The Fearless Indian
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Why the latest Ola, Uber strike was a disaster waiting to happen and how it will impact you!

  • Siddhant Ghatge
  • March 20, 2018
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About 1.5 million Indians drive for Uber, Ola and in Mumbai alone, there are over 45,000 Ola and Uber cabs. On Monday, many of them refused to work as thousands of drivers participated in the countrywide strike, immobilizing traffic and creating massive inconvenience for commuters.  The strike hit Mumbai the most as it was called by the transport wing of the Maharashtra Navnirman Sena (MNS) against cab aggregators Uber and Ola from Sunday midnight. According to Sanjay Naik, president of the MNS transport wing, “Ola and Uber had given big assurances to the drivers, but today they are unable to cover their costs. They have invested Rs. 5-7 lakh and were expecting to make Rs. 1.5 lakh a month. But drivers are unable to make even half of this because of the mismanagement by these companies.”

It wasn’t always like this. If you study the revenue model of the two companies and inspect their alluring offerings since the beginning, both the companies offered great pay. When Uber entered India and Ola turned more aggressive due to an international giant’s competition, the two companies went all out to lure drivers. They promised drivers a minimum income of 1 lakh on minimal commission as less as 10%. It was so appealing that some salaried workers quit their jobs to drive. Farmers sold their land and bought cars instead, often on credit. But the promised rewards never materialized. Also, the huge influx of willing drivers meant these companies didn’t have to compete so hard to woo drivers. Today the drivers barely make Rs. 20,000 to 30,000 and the commission has skyrocketed to 30%.  Eventually, as the sector matured the two rivals turned their focus to profitability and used the drivers as a means to achieve that and drastically started reducing their incentives while introducing benefits the customers alone.

In yesterday’s strike, some of the drivers refused to participate as they couldn’t even afford to take a day off from work. It is alleged that the MNS supporters stopped cars in the suburban Marol and Ghatkopar areas and broke the windshields of Ola and Uber cabs, which were not a part of the strike. All this resulted in severe inconvenience to commuters as the waiting time to get a cab was longer and prices on the surge,as there were very few cabs available in the city due to the strike.

The drivers are demanding a pay hike and are willing to share only a smaller percentage of commission with the company. Apart from that the drivers also allege that the aggregators favor their own company cars and drivers more than the partners, they also demanded that the pool and sharing services be taken off completely. An unrealistic demand of the union is to reinstate all the ‘blacklisted’ drivers, who were banned due to unfavorable customer feedback.

This is a catch-22 situation for both the companies as favoring the drivers would mean taking a toll on customer service. The companies who are already sailing in a sinking ship if agree to give a pay hike to drivers would only mean a hike in the fare costs, which will be recovered from you and me. Now only time will tell what would be the way forward in such a situation?

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