Several drivers have had their cars seized as they were unable to pay the EMIs, and many have been forced to look for alternative options for income.

A cab driver with a phone mount receiving a notification for a ride
Atom Transportation Wednesday, November 03, 2021 - 17:26

Rising fuel prices in the country have impacted everyone. But it has had a particularly negative effect on drivers for aggregators such as Ola and Uber, robbing them of their source of income. The COVID-19 pandemic and the subsequent lockdowns meant that many of these cab drivers had already gone months without work and were staring at piling EMIs and running households on reduced incomes. Added to this, the constantly rising cost of fuel has made cab drivers question if they should continue working at all.

In both Bengaluru and Hyderabad, cab drivers have largely been able to earn a decent living thanks to the work coming in from the city’s IT sector. However, post the pandemic, with a large majority of IT employees still working from home, they haven't been able to depend on this for their livelihood.

Murali, an Uber driver in Bengaluru for the last five years, tells TNM that earnings were comfortable in a pre-pandemic world, boosted by plenty of customers from the IT sector. Now, he says that for every Rs 1,000 he spends, he makes back only about Rs 800.

Murali works nearly 12 hours every day but still struggles to make ends meet. “Even though there are not as many customers right now, I do it to make enough to meet day-to-day expenses. But there is no question of saving even a little bit for the future despite working long hours,” he says. Murali, like several other drivers, says that if the option of driving for IT companies was available (to pick up and drop off employees), they would be happy to take it up.

In Bengaluru as well as Hyderabad, drivers say that they have to drive much farther than before to get a customer, and the frequency has reduced. Many drivers, TNM spoke to say that customers are sometimes 5-6 km away, and the fuel consumed to reach them is not compensated for. Sometimes, rides come from as far as 12 km away, they say.

According to Murali, it was possible to make around Rs 250 each hour before the pandemic hit. Now, he says that is down to Rs 100. This, after driving around looking for customers for hours and spending a lot of time on the road waiting, he says. He further points out that a major portion of his earnings goes into buying fuel.

Rising fuel prices, falling income

The price of diesel — used by cabs and other commercial vehicles as previously it had been far cheaper than petrol — has risen on 30 out of the last 40 days, and is pushing Rs 100 in many parts of the country.

To put things in perspective, the cost of diesel in Bengaluru on November 2, 2021, was Rs 104.5 and in Hyderabad, it was Rs 107.4 per litre. On March 16, 2020, prior to the lockdown, diesel in Bengaluru cost Rs 64.4 per litre and Rs 67.8 per litre in Hyderabad.

K Somashekar, leader of the Congress-backed Namma Chalakkara Trade Union, says driving for companies such Ola and Uber is like a gamble. As per his estimate, 40-50% of people who began to drive for cab aggregators have now switched to a different profession.

“It is really difficult now. The price of diesel increases but the mileage of our vehicles remain the same. Our earnings are decreasing more and more. We are absolutely unable to have any savings. Nearly 50% of earnings goes to pay for the fuel,” he says.

According to Tanveer Pasha, founder president of the Ola Uber Drivers Associations in Bengaluru, drivers made around Rs 1,000 a day after expenses when diesel was around Rs 60. Now, he says they have to work longer hours, and thanks to increased costs and decreased rides, barely make Rs 100-200 per day after expenses. He estimated that prior to the pandemic, for a full tank that would last them 200 km, drivers were spending roughly Rs 1,000-1,200. Now, to cover the same distance, he says they have to spend upto Rs 2,000 on fuel.

Forced to leave

These factors have made driving for aggregators an unprofitable business, to say the least. Driver associations in both cities tell TNM that many drivers were forced to return home especially after the second lockdown for lack of earnings. In addition, due to not being able to pay EMIs, cars have allegedly either been seized or drivers have been forced to refinance their cars. 

Tanveer Pasha and Shaik Salauddin, president of the Telangana Gig and Platform Workers Union and general secretary of the Indian Federation of App-Based Transport Workers, say drivers are pressured by financial institutions to pay up or surrender their cars. In Bengaluru, Tanveer Pasha pegged the number of cabs being seized at 15,000.

“In the name of incentive and commission, companies are not giving us anything. We don’t want incentives, we want what we are owed. Fix our wages where we will get paid a fixed amount for a specific number of rides. The companies are not cutting their commissions either. There is no compromise anywhere,” says Salauddin. 

Kannaiah, who used to ply a 7-seater car on cab aggregator platforms in Hyderabad, stopped driving for them three months ago after it became unsustainable.

“Before the lockdown, we used to earn decently, where even after paying for diesel we used to have about Rs 1,500  at the end of the day. Now, after commission, we barely have Rs 500 in hand.  Now there’s no business. Fuel rates have gone up and commission is also around 35%,” he alleges. This made it impossible to pay the EMI on the car, which was higher as he has a bigger car.

“Half of what I was making before was going towards EMI. After the lockdown, the financier also began demanding payment, and I was forced to refinance my vehicle. Because of that, the amount I had to pay has gone up, and so has the duration of payment. I was told to either refinance the car or handover the vehicle. It’s hard to even survive with this. We asked for time but only the interest went up,” he says.

He has now switched to driving for a tours and travels operator, where the money he says is better, albeit not steady.

Cabs off the road

Salauddin says that while fuel prices continue to rise, the prices charged by the aggregator companies to the customers is not going up accordingly. “This is the biggest source of difficulty today. Companies should understand and increase rates that drivers can earn in accordance with the increasing rise in fuel prices. It is severely affecting driver earnings and livelihood,” he says.

An increase in rates was the primary demand of drivers who TNM spoke to, who still continue to drive for both companies.

In fact, to combat the pricing, the Karnataka government in April had raised the minimum fares that cab aggregators such as Ola and Uber should levy to Rs 75.

Read: Min fares of Uber, Ola, other ride-hailing apps to increase in Karnataka: New rates

Ashok Kumar, a president with the Ola Uber Drivers Association alleges that despite this fare hike, where a minimum of Rs 18 per km has to be charged beyond the base rate for a non-AC car, only Rs 9 is being charged to customers. Rs 9 per km was the fare when diesel cost around Rs 60 per litre.

“The drivers have been suffering since before both the lockdowns, and things are much worse after the second lockdown. The drivers in Bengaluru city still need to pay rent and survive. In the village, there will be some support. People here have no help — rents have gone, petrol, fuel and gas have all gone up. No one is helping,” he states.

He adds that if the government were to make an app with fixed rates and levy a commission, drivers will pay the commission for that and the money could go to the government. 

The number of cabs, too, have significantly reduced on the roads in these cities, estimate associations.

In Bengaluru, Additional Transport Commissioner in Karnataka Hemant Kumar says that they expected an increase in the number of commercial vehicles being registered, but it has remained stagnant. According to him, pre-pandemic, there used to be roughly 50,000 commercial vehicles (across buses, trucks etc) registered a month, this is currently at 1,000-2,000 vehicles a month. He too says that there are fewer autos and cabs on the road.

In terms of governmental support, the Karnataka government offered one-time assistance in May 2020 and May 2021 with aid of Rs 5,000 and Rs 3,000 respectively.

While cab companies have committed funds to driver-partner vaccinations and disbursal of microloans, there has been no communication so far on an increase in fare due to the highest-ever prices of fuel. Until then, drivers only ask for one thing to stay afloat — a decent income. 

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