Fare thee swell

In 2014, having air-conditioned cab arrive at your doorstep in this tropical country at prices cheaper than old clunkers plying in the name of taxis and autos were charging seemed like a joyride. For the drivers, somehow, the benefits seemed to keep flowing in, despite the advantages given to the consumers. The administration kept its head down, hoping it wouldn't have to come up with alternatives to inadequate public transport.

Nearly five years later, disruptors of public transport, led by Silicon Valley-based Uber and homegrown Ola, stand disrupted from within. Their partner-drivers are unhappy, their passengers angry, and benefits drying up. On Friday, the men driving with Ola and Uber called off a 12-day strike, which saw commuters who had come to rely on them sweating on the road in their quest to hail a cab.       

The cab aggregators which made deep investments in the gig economy seem to be in need of a long-term solution.

Glance in the rear-view

For a time after their entry into the market, as Ola and Uber jockeyed for passenger loyalty, they gained currency through lucrative incentives (for drivers) and cheap travel (for customers). The partner-drivers, who were owners of the vehicles, felt a measure of freedom as they had the option of refusing a fare and were more self-employed than salaried. They were promised monthly earnings to tune of Rs 1 lakh and above for driving around the city for 8-10 hours. The companies had made entrepreneurs out of them.

The commuters hadn't had an easier ride. They could travel for 8-10 kilometre for barely Rs 6 a km over the base fare. This was cheaper even than auto rickshaws in a city like Mumbai, and exponentially more comfortable. The drivers were polite. The ride was cool. People were hooked.

Things were so plum for the two cab operators that in under five years since their launch, they cast their net wide: Uber today operates across 12 cities while Ola in at least 20. During this phase of expansion, the number of tourist taxis registered with regional transport offices in Mumbai, jumped from 3,000 to 59,000. Over 90 per cent of these operate with the duo.

But Indians are a price-sensitive lot, which means that if discounts wane, incentives dissolve and prices yo-yo too much, we shun the "unreliable" service. This is already happening.

"Now that aggregators are withdrawing inducements, it's disgruntled both passengers and drivers," said Ashok Datar, an economist who is the chairman of Mumbai Environmental and Sustainable Network, a charity.

Globally too the format is under scrutiny. In London, a case is being heard in the Court of Appeal where two drivers have contended if Uber drivers are really self-employed, since they are in the clutch of company rules and regulations. In Bulgaria, Denmark, Hungary and the northern territory of Australia, the authorities do not like the cut of Uber's jib and have banned it. In France, Germany, Italy, Hong Kong and US state Oregon, there are partial restrictions on it.

"Uber is a purely technical and financial-driven company. If unionism by drivers affects their businesses, there is a possibility they could exit the market. Ola on the other hand is an Indian company so it is hard to say how it will they react," said Mumbai-based transport expert AV Shenoy.

Nature of the beast

Attractive pricing is not a crime. But it normally comes at a cost. Transport planner Vijayshree Pednekar of The Urban Project, a design studio, asks a pointed question. Since Uber and Ola are not aided and budgeted the way civic transport like buses and local trains is, who is paying the actual cost of running this privatised mode of public transport? After all, someone has to pick up the tab. Any guesses who?

On October 22, partner drivers that ride with the cab aggregators came together in a concerted industrial action to demand a 25-50 per cent fare hike, among other things. Taxis and auto rickshaws do this every time the cost of living or fuel goes up, and transport authorities usually give in, leaving the public to settle up the bill. Now cab aggregators got their first real taste of unionism, and yet again, the commuter was held at ransom, particularly since governmental authorities baulked at resolving the strike, since the aggregators are beyond the purview of the Motor Vehicles Act and do not constitute essential services owing to their private and independent operations and ownership.

A two-player car-tel

It was to untie regulatory knots like this that the Maharashtra government commissioned the BC Khatua panel to report the issues plaguing the functioning of cab aggregators and recommend fixes. The panel submitted its report in September 2017. It stated that the public was happy as a clam with lower fares and cushier services, but found indiscriminate surge pricing during rush hours, when many riders vie for cabs, abhorrent. It suggested capping dynamic pricing, limiting the number of aggregator cabs and segregating fare slabs depending on the type of engine (whether above or below 1400cc). It also spoke of ways to regulate cartelisation of the industry.

Fourteen months later, the report is still lying in cold storage. Transport officials say the ball is in the state government's court, which needs to decide how to administer the solutions.

Rishi Aggrawal, a transport expert who runs the Mumbai Sustainability Center, said, "The state is not taking note of the real problem in front of them. It's a serious lapse. This was a bubble waiting to burst. The government is sitting on the Khatua Committee report, doing nothing to induct app-based aggregators into the law".

Ola didn't respond to quesries emailed by DNA, while Uber kept its response concise.

All-day surge

In the Rajasthan state capital, with the beginning of the festive season, rates are peaking for about 25,000 app cabs running in the city, not only during rush hours but for any time of the day. It is tourist season till March.
Vidhi Tiwari, an English Literature teacher who commutes every day from Sanganer to her college in C-Scheme, said she used to pay Rs 214 for the ride, The fare is Rs 285 now. "There has even been surge pricing during afternoon," she exclaimed. This is not an isolated case. Try hailing an app cab after jumping out of a double-decker train at 10 pm, and you'll be greeted with the message, "Dares are slightly higher due to increased demand".

"Once I tried to book a cab from inside a plane to escape the rush outside, but the fares were 'substantially higher than normal'," said Akhilesh Sharma.

The drivers, meanwhile, claim that the companies apply surcharge in case of increase in demand but they never see the benefits, a plaint across cities.

"The companies take surcharge from customers but we do not get anything from it," said Yogesh Kuntal, president of Rajasthan Vahalchalak Sangathan, which claims to represent drivers of Uber and Ola. The state transport department has no rules for controlling surge pricing, though it regulates fares of buses and auto rickshaws.

In Ahmedabad, there is simmering discontent among drivers. Drivers rue that the deal with cab aggregators is no more lucrative as the number of cabs has risen exponentially. Himanshu Shah, the president of Ahmedabad Gandhinagar Radio Cab Owner's Association, said that there are close to 6,000 cabs in Ahmedabad and Gandhinagar alone and there should be a cap on the numbers to protect those who have invested get remunerative returns.

Drivers affiliated to Ola and Uber had gone on a strike in April 2017, following which a committee was formed by the Gujarat transport department to affix fares. But nothing has materialised. "Uber is not budging. Ola is flexible, but says it would follow any rule that Uber follows. So there is a deadlock," said Shah.

But passengers aren't that annoyed, except for the type of cars included in the fleet. Jayendra Tanna, former vice president of Gujarat Chamber of Commerce and Industry (GCCI), said the type of car he gets doesn't exactly please him. Where once he'd get a compact sedan like Maruti Suzuki Dzire or Tata Indigo, he gets a Maruti Eeco now. The good cars are offered under Uber-X, which is way more expensive.

In Delhi, the government has been mulling regulating surge pricing for two years, ever since the Aam Aadmi Party government announced a ban on it in 2016. In 2017, the government started preparing the City Taxi Scheme 2017 which had provisions to cap maximum fare. Delhi Transport Minister Kailash Gahlot had said the players would be allowed to charge extra above the base price but there would be ceiling to this. Speculations are that the amount will be Rs 10 per kilometre above the base price.

In October, the city came to a standstill when drivers suspended work against the government's "unfriendly" policies, and demanded a hike in base fares as fuel prices had shot up. The strike was called off within a day and it has since been business as usual.

All indicators are in place that government needs to formulate policies to protect the interests of drivers as well as passengers, now that cab aggregators have weaned people off of traditional public transport, and even replaced them in many ways.

Inputs by Shashank Rao, Mehul R Thakkar, Abhishek Tiwari; edited by Manavi Deopura

Short-Lived Happiness

• Rs 1L Monthly earnings initially promised by Ola and Uber with 8-10 hours of driving a day, according to the drivers. The companies had made entrepreneurs out of the drivers in initial days
• Commuters too had an easier ride. They could travel for 8-10 km for barely Rs 6 a km over the base fare. This was cheaper than auto rickshaws in a city like Mumbai
• Things were so plum for the two ride-hailing operators cast their net wide: Uber operates across 12 cities in the country, while Ola has presence in at least 20