Striking Ola, Uber drivers see a bleak future

Sai Charan, a tech worker in one of the global firms in Mumbai’s Bandra Kurla Complex, reached the city after a long business trip last evening. Like any other day, he logged in to his Ola app to book a cab to his office only to find that there were no cabs available. He tried Uber, but in vain. Black and yellow taxis refused a ride. Finally, he booked an auto rickshaw for ₹500, almost 150% more than the usual fare.

He is not the only one who has had to pay a lot more than the usual fare for rides in Mumbai as commuters are unable to book cabs at a tap of a button. Hundreds of drivers of ride-hailing apps, Uber and Ola, have been on strike for 11 days in a row demanding higher pay.

And the strike is only set to continue as they feel that their demands have fallen on deaf ears.

Prasahant Sawardekar of Maharashtra Rajya Rashtriya Kamgar Sangh, the drivers’ union that is leading the protest in Mumbai told Fortune India on Thursday that they have not heard from any of the companies yet and that the protests will continue till their demands are met.

“Ola representatives had told us that they will give us a clarity today, but they called off the meeting at the last minute,” Sawardekar said.

Hundreds of drivers gathered outside the Ola office in Mumbai’s crowded Andheri East, shouting slogans like “Ola, Uber down down”, as they waited for the final meeting to take place today.

Drivers of these ride-hailing cabs have been unhappy with falling incomes over the past few years. Drivers at the protest told Fortune India that their incomes have dropped by at least 50% to ₹50,000 per month lately due to the maintenance expenses of cars, refunds for ride cancellations, and soaring fuel prices.

Petrol, diesel, and CNG prices have gone up by as much as 10% this year, with distant pick-up points adding to the fuel bill.

The cab aggregator firms offer different categories of booking – ranging from small cars to SUVs – at different price points for commuters, starting ₹6 per kilometer.

Drivers also want a cap on the number of cabs the aggregators get on board, as they are often pushed to take the cheaper micro or mini rides as they don't get enough bookings in the higher-paying prime segment.

“If we drive a Sedan car (usually listed for the prime category in Ola) for Micro rides (assigned usually to small cars), how are we going to raise the cost of the car,” said another driver.

Several drivers had bought more than one car to make the most of Ola and Uber incentives. Now, as incentives have dried up, the car owners are being forced to sell-off few cars as they have not been able to pay the EMIs.

Sawardekar said that after rounds of discussion, Ola has agreed to raise the fares from ₹6 per kilometer to ₹12 per kilometer for Micro, ₹11 to ₹15 per kilometer for Sedan and ₹14 to ₹19 per kilometer for SUVs. However, they have removed the components of base fare and waiting time.

“We will not call off the strike until they confirm that they will retain the base fare and wait time components in the invoice,” said Sawardekar. Base fare ranges between ₹40 and ₹120 depending on the category of the booking and waiting time is ₹1.20 per minute.

The strike comes during the festive season and at a time when Diwali, one of the most widely celebrated festivals, is just a few days away. As people throng markets to buy goods and visit each other during this period, the strike is expected to have a deeper impact on the two cab aggregators' earnings in the current quarter. Also, Mumbai is one of the top three markets for them. Though the two firms have not divulged the financial impact of the strike, they are grappling with losses year on year.

Ola saw its losses widen to ₹4,897.8 crore in FY2016-17, compared with  a loss of ₹3,147.9 crore in FY2015-16,  according to the documents filed with Registrar of Companies (RoC). During the same period, ANI Technologies’, which runs  Ola, consolidated total income rose 70% to ₹1,380.7 crore compared with ₹810.7 crore a year ago.

Uber, Ola's arch rival in India, is also seeing massive losses. The San Francisco-headquartered firm posted a loss of $4.5 billion in 2017, up from $2.8 billion in 2016.

“Uber is proactively exploring all possible options to restore services and best support our driver partners. In this respect, we have engaged with relevant stakeholders today to solve the impasse. We wish to reassure city authorities, our driver partners and riders that restoring services at the earliest remains our highest priority,” Uber said in a statement on Tuesday.

(Additional reporting by Deepti Chaudhary)