This Is How Uber Is Entering A Deep Shit Zone in India

Here is a quick rundown of what has happened with Uber India in the last 1 month.

Uber's Bangaore Office Smashed
Uber’s Bangaore Office Smashed

Uber Hyderabad drivers staged one-day strike
– Uber Bangaore office smashed
– 20,000 drivers are expected to go on strike.
– There are rumors of Uber Maharashtra facing similar issues.

In short, Uber is entering a deep shit zone in India and largely because of its internal choices and not external conditions.

Uber : A Victim Of Its Own Success?

Like any well funded company, Uber gave away a lot of incentives to drivers. For instance, a drive to (Bangalore) airport was an easy profit of Rs. 500 for the drivers.

And now?

Uber has cut down on all such incentives and is instead paying Rs. 275 per hour to drivers* irrespective of whether they are driving to the airport or inside the city (also, irrespective of number of rides per hour/day).

In fact, most of the Uber drivers are rejecting airport rides citing various reasons (the most frequent one being ‘I don’t have a permit’) – mainly because there is very little RoI for them.

As some of the drivers told us, Uber has stopped giving them commission (on the billing) even though the company is charging surge pricing.

What about others?
Competitors like Ola are paying on commission basis and has so far, stuck to its incentive scheme (with a bit of fluctuation).

In Bangalore, Uber drivers are flocking to Ola as if there is no tomorrow (for Uber).

The Bad Uber Experience. Becoming A Norm?

My last 2 rides with Uber has been very scary. There was massive traffic while on the way to airport and while I was getting delayed, Uber sends app notification to the driver

“Uber is canceling the trip. Please drop the passenger at a safe location”.

All in the middle of the trip !

I somehow convinced the driver that there was a problem with his app and I even offered him cash incentive to make up for his trip. And in between all of this, Uber canceled the trip and it was one heck of a last minute fight – with both driver as well as airlines.

The challenge here is not about Uber’s great algo which figured out the trip was running for more than usual duration – but lack of local understanding (traffic conditions) that makes it an extremely un-uberish experience.

A marketplace with zero assets cannot afford to screw around with both ends (of the marketplace) so badly. 

Uber’s problems in India will intensify further unlesss the company gives away a bit of its arrogance and somehow figures out a balance between profit and incentives.

Uber started off as a great professional experience (for both drivers and customers) and is now turning into a below-mediocre experience. A case of scaling challenges in India or a case indifference?

** As per Uber drivers.

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8 comments
  1. This is all expected to happen with all such startups riding high on investors money to lure customers , but indian customer is also very smart they are loyal to no one do what ever you can do they will come back and follow again back to old way of commuting and shopping

    the day is not far when Flipkart/amazon /snapdeal and all grocerry companies do the same , just wait and watch guys 🙂

    a real business as popularly said is one where you make profits from first sales itself !!

  2. Its facing the same problem in China. last week, there was huge protest in Chengdu where drivers were beaten up by mobs.

  3. These companies are disobeying rules, laws from the day one in the name of ecommerce and innovation. And now they have grown to such a size riding on the hype wave, that they are broking moral basics and acting tyrranical. People initially benefit from their innovation as well as their breaking of the basic laws of the land. Public authorities are helpless in front of public support and craving media.

  4. First the authenticity of the article…..may be true. This whole cab business with incentive is drawing every body into cesspool all the stake holders like operators,investors, cab owners/drivers and last but not least the customer the most. As already pointed above they flaunt all possible rule in the rule book, the drivers are behind incentives…so they have any heed for customer, operator is behind organic or in-organic growth as it would mean more revenue and investor is only looking ahead four or five years down the line…and at present only customer is suffering at present. Rs 3.70 ps is the per km cost fuel wise + maintainance + ownership locally they charge 6-7 Rs un-organized cabs, uber or ola or any body have so Rs 10 as min charge for firs five km and then onwards you get all these fringe charges….peak traffic, mins travelled, service tax..cess extra. If you take take local cab for a ride on a lum sum it would work better, but only advantage with uber or ola is there navigation and pick up system which is some times pathetic. Drivers are some time reckless are they are suppose to make certain trips to be eligible for incentive. The whole sytem for driver revolves around incentive, operator tries to diffuse it by having bigger fleet, investor is happy that he is going to make profit in a couple of years and mean while operators play inteligent game of converting valet money into latent voucher assuring that customer will certainly will avail their facility. So its a fair cess pool where every body is caught…..enjoy.

  5. UBER/OLA and many other startups which started by giving discounts and subsidies will learn one hard day that only way to survive is by making money . MERU was built on profit from day 1.
    The model is good – but pricing and incentives needs to be consistent .

  6. Ola is no better either – I’ve been having horrible experiences with them recently.
    1) Drivers (both autowalas and cab drivers) are insisting on getting paid by cash, and not Ola money. Once, this guy even took me to an ATM and asked me withdraw cash and give, when I said I don’t have money on me
    2) Their map navigation for drivers is horrible. Cabbies always ask for location multiple times before arriving
    3) Every time I book a ride, the cabbie calls and asks for drop point. If I say some unpopular place, they immediately cut the call and cancel the ride (or ask me to cancel it!)
    4) Last week, an Ola cabbie also told me that they don’t get any cut from the surge pricing which is levied during peak time

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