Boy, did Uber, Ola take us for a ride!

Boy, did Uber, Ola take us for a ride!

The horrendous traffic explosion in Bengaluru, with 70 lakh vehicles occupying the roads meant for a far fewer number, can only be ameliorated through greater use of public transport.

Long troubled by an undependable public transport system, the patient, ever-suffering Bengalurean nevertheless travels by the Metro along its green and purple lines, uses the 6,500 buses of the BMTC, the nearly two lakh auto-rickshaws and over 1.7 lakh luxury taxis, black-and-yellow cabs and cabs from the local cab rental service, all meant to convince residents to abandon their private cars and two-wheelers and to take public transport.

Unfortunately, the Metro has a limited presence, suburban trains are practically non-existent, taxis are expensive, buses unreliable and haggling with auto-rickshaw drivers an exasperating experience. Besides, the city never had a history of metered cabs, like in Mumbai, where residents and visitors hail one of these vehicles irrespective of the time of day, nor the Delhi system of neighbourhood cab stands, where drivers live, eat and are always available in your locality.

The Bengalurean inclined to take public transport relied on a network of autos and buses until five years ago, when the arrival of online cab aggregators Ola and Uber totally disrupted travel, with their promise of cheap and safe rides making it easy to get around the city or to work late without owning a private vehicle.

In the early years, both customers and taxi drivers enjoyed significant benefits. Customers were charged moderate prices with the added advantage of being able to book a cab at any time of the day or night. Taxi drivers, meanwhile, were seeing their incomes rise with the likes of Ola and Uber offering lucrative incentives.

When Ola and Uber came into the market, they needed drivers as much as they needed customers. Demand and supply had to match but initially, they knew they needed more drivers on-board so that customers could find cabs everywhere.

To attract drivers, they started giving huge incentives, which attracted more and more drivers to come on board. Even unemployed people started buying cars only to get on to the Uber or Ola Cabs platform. Importantly, the aggregators kept innovating — customer pools, micro vehicles for a cheaper ride, even  bike-taxis were in the offing. The ubiquitous autos, too, had made themselves available on their platform. Not only did this provide a more convenient commute, the price of commuting, too, fell along the way.

However, as Uber and Ola reached their targets and had enough drivers and taxis on board, they started reducing these incentives and the heady days of meaty commissions and exploding consumer interest plateaued. Slowly, they stopped the incentives and started charging drivers for internet and mobile usage. Meanwhile, several taxi drivers and owners anticipating high incentives had bought cars by taking loans. Banks gave them loans but at a higher interest because the risk of default was higher and the car is a depreciating asset.

Now that fuel prices have also gone up, internet and other charges are to be paid, hefty EMIs to be paid, and car maintenance charges to boot, the drivers are left with very little! Bookings have also decreased due to the increase in the number of taxis on the road, although customer demand has been stagnant, resulting in a lot more idle time for drivers.

The financial landscape for both cab aggregators and drivers having changed forever. Drivers are left at the mercy of India’s informal economy, forcing a good many of them to leave the aggregators or to get together to launch protests across the city.

Our omniscient government stepped in, wanting to regulate ride prices and has notified a minimum and maximum fare for Ola, Uber and other app-based cabs and radio-taxi services. The government requires the cab aggregators to introduce four categories of fares, depending on the size and the cost price of the taxi.

“Surge pricing” is another ticklish issue. For long, the cab aggregators’ Achilles’ heel, it ensures that the ride price rises in times of high demand, to encourage drivers to flood the zone. Surge pricing nonetheless makes the ride unaffordable for those moving up from cheaper options like the autos.

The Bengalurean’s honeymoon with app-based aggregators is drawing to a close. Tired of steady hikes in fares, errant drivers and unending wait for cabs, commuters are going back to the Metro, buses or the autos or, worse, returning to their private vehicles, choosing to face the city’s notorious traffic jams.

The heady intent of having a robust public transport system to avoid using private vehicles, reduce fuel consumption, check pollution, bring down accident rates, and even save commute time has now gone into limbo. In this conflict between convenience and commerce, the Bengalurean is losing out. 

(The writer is a former director on the Board of BEML)