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If you do the math in India, the drivers were basically not earning any money last year. They spend about 30% of their income of debt. Another 30-40% on fuel a

If you do the math in India, the drivers were basically not earning any money last year. They spend about 30% of their income of debt. Another 30-40% on fuel and maintenance cost. Then 20% charged by Ola and Uber. There’s other miscellaneous fees that creep up plus insurance every year which atleast takes another 10%. So they take home around 10%. That 10% has to pay for food, rent, children’s education, etc. The argument can be that they’re technically taking home 40% if you take their debt payments that’s paying for an asset. But a car is a depreciating asset, so after 5 years they’ll technically have lost 50% of that money. The 10% decrease in fees would go a long way for these drivers. I’ve spoken to a lot of them and it’s really sad what’s happened. You may ask why did they join in the first place ? They were attracted to these services by glamorous stories of cab drivers making 1500-2000$ a month on these apps. But all fo that income was funded by inorganic incentives that never fit into the unit economics. It was basically VC funding that was channelled into a few drivers income, which then brought in a lot more. I feel strongly about this as I’ve spoken to multiple drivers who make very little money and work about 12-14 hours a day. You can see a lot of them just sleep in the car in the night to make sure they can make ends meet. On the other side, they’ve stopped heavily discounting the rides at the consumers end, which means demand has decreased because they had artificially inflated demand by providing a service at discounted prices. So that means drivers don’t get as many rides either. It’s basically a double whammy for the driver. Aggregators charging 20% of the ride costs is just unempathetic and stupid if they actually did the math. But obviously they’ll have to recoup all the VC money they’ve invested. It baffled me for a long that the unit economic never made sense for the longest time. They took no fees, they gave discounts and they attracted drivers by inspiring them of glamourous stories where cab drivers were making more than most employees in India. Most cab drivers who saw this as a gold rush, took on a lot of debt to buy a car and drive people around. With time they’ve realised it’s all a sham but there’s nothing they can do about it. They’ve already committed to the debt, and if they stopped paying it, they’ll loose the car, which is all they have as assets.

throwGuardian 7y ago
If this were true, drives would quit en-mass. This is entirely an at-will engagement, any party can back out at any time if things don't work out
- biased_coin 7y ago
  It is not easy for drivers to quit given the debt that they've taken on. It is tougher to operate as an independent taxi driver than to be on a platform. Many of the drivers I have spoken to have migrated from smaller cities and I doubt it would be easy for them to operate independently.
  - rrrazdan 7y ago
    It's auto debt. The car will be taken by the bank. What else can the bank do? The truth is that cab drivers are making a livelihood, in fact a much better livelihood than they were making without Uber and Ola.
    - rajaganesh87 7y ago
      > much better livelihood than they were making without Uber and Ola Source please. Also can you quantify "much better"?
      - rrrazdan 7y ago
        I think my assertion is much more likely than yours that people were in higher paying jobs and moved to Uber/Ola, a lower paying job, so you should give a source for that. Nevertheless the source is my twice daily ride with Uber and talking to the drivers. Most of the drivers are youngsters from villages with no degrees and no skills now making a living. They also don’t own the car and drive for someone else. The fact that the Uber/Ola commission is able to support the driver and owner should tell you something.
    - sumgame 7y ago
      So let’s say you’ve paid 20% of it as advance, plus you’ve spent a year figuring out Uber and Ola are fleecing you. In that year you’ve put down another 10% into instalments. What then ? You’ll give up 30% of the money just because you don’t like Uber and Ola anymore. If the bank takes the car back, the driver loses all the money he’s toiled to make. If you speak to a lot of them, they’ll tell you that once they clear the car debt and sell the car, they’d most probably head back home to their villages and just go back to farming. They work a few hours a day and make 100-200$ a month. Vs making almost the same by toiling 12 hours a day in a car and in some of the worst traffic conditions.
grwthckrmstr 7y ago
Unfortunate truth. For those who say drivers can just quit, try quitting your job when you are an unskilled labourer from a low income background without any significant savings, burdened with loans, you are the only income earner in your family of 4-5 and you have to cover food, rent, kid's education etc. Please, have some empathy.
- thrwe4234safd 7y ago
  Plus, these people have likely had to sell off inherited agricultural land in pursuit of the glamourous life promised by the taxi aggregators. I imagine once all this money-printing madness (VC money is often from places with lots of "funny money") gets over a lot of people will move back to their rural lives - which I've to say has a lot more quality compared to the city (modulo the power cuts/sanitation/ general lack of technology.... but this is getting better by the day).
  - deleted 7y ago
    [deleted]
  - sumgame 7y ago
    Interestingly a lot of them I’ve spoken have said that they just want to give it all up and move back to their village and farm. The more time they spend in cities , the more they realise how much freedom and happiness they have They’ve realised that even if they don’t make as much money in a farm, it keeps them happy and it gives them food.
- theflyinghorse 7y ago
  Of course we should have empathy. That being said why do you have 4-5 kids if you know you can't properly support them? That seems incredibly irresponsible.
  - wavefunction 7y ago
    Family size may be a holdover or maintenance of a tradition that was once needed due to infant or child mortality and agricultural practices that require manual labor.
thrwe4234safd 7y ago
> They were attracted to these services by glamorous stories of cab drivers making 1500-2000$ a month on these apps. Adding more anecdotes about the insanity, papers a few years ago were rife with stories about Engineers quitting their jobs and turning into cab drivers overnight and making more money as a result! All this when OlUber fares were essentially costing the same as an Autorickshaw! It's little wonder that all the magic didn't last; one also wonders how much of this slowing down led to the current lack of demand in the Automotive sector. Most taxis here appear to be Suzuki Swifts, and Maruti-Suzuki has seen a big slow down as of late (but so have VW and other "premium" brands). The result of all this madness is that a large fraction of egregious cars that ply on roads in Bluru are taxis, which as a bicycle commuter, has become a nightmare to me personally due to their collective recklessness. Then again, they have helped tackle the annoyances from the lack of service and "extra" charges of the Auto unions and the insanely crowded public transport systems.
osrec 7y ago
It is a rather dire situation indeed. I saw a documentary on Uber drivers in India, and a few of them had been convinced to take on crippling levels of debt. When demand dropped (and number of Uber drivers increased) this eventually caused them to take their own lives.
TheCoelacanth 7y ago
Uber is the world's largest perpetrator of predatory pricing. They are practically begging for government regulation.

throwGuardian 7y ago

If this were true, drives would quit en-mass. This is entirely an at-will engagement, any party can back out at any time if things don't work out

biased_coin 7y ago
It is not easy for drivers to quit given the debt that they've taken on. It is tougher to operate as an independent taxi driver than to be on a platform. Many of the drivers I have spoken to have migrated from smaller cities and I doubt it would be easy for them to operate independently.
- rrrazdan 7y ago
  It's auto debt. The car will be taken by the bank. What else can the bank do? The truth is that cab drivers are making a livelihood, in fact a much better livelihood than they were making without Uber and Ola.
  - rajaganesh87 7y ago
    > much better livelihood than they were making without Uber and Ola Source please. Also can you quantify "much better"?
    - rrrazdan 7y ago
      I think my assertion is much more likely than yours that people were in higher paying jobs and moved to Uber/Ola, a lower paying job, so you should give a source for that. Nevertheless the source is my twice daily ride with Uber and talking to the drivers. Most of the drivers are youngsters from villages with no degrees and no skills now making a living. They also don’t own the car and drive for someone else. The fact that the Uber/Ola commission is able to support the driver and owner should tell you something.
  - sumgame 7y ago
    So let’s say you’ve paid 20% of it as advance, plus you’ve spent a year figuring out Uber and Ola are fleecing you. In that year you’ve put down another 10% into instalments. What then ? You’ll give up 30% of the money just because you don’t like Uber and Ola anymore. If the bank takes the car back, the driver loses all the money he’s toiled to make. If you speak to a lot of them, they’ll tell you that once they clear the car debt and sell the car, they’d most probably head back home to their villages and just go back to farming. They work a few hours a day and make 100-200$ a month. Vs making almost the same by toiling 12 hours a day in a car and in some of the worst traffic conditions.

grwthckrmstr 7y ago

Unfortunate truth. For those who say drivers can just quit, try quitting your job when you are an unskilled labourer from a low income background without any significant savings, burdened with loans, you are the only income earner in your family of 4-5 and you have to cover food, rent, kid's education etc. Please, have some empathy.

thrwe4234safd 7y ago
Plus, these people have likely had to sell off inherited agricultural land in pursuit of the glamourous life promised by the taxi aggregators. I imagine once all this money-printing madness (VC money is often from places with lots of "funny money") gets over a lot of people will move back to their rural lives - which I've to say has a lot more quality compared to the city (modulo the power cuts/sanitation/ general lack of technology.... but this is getting better by the day).
- deleted 7y ago
  [deleted]
- sumgame 7y ago
  Interestingly a lot of them I’ve spoken have said that they just want to give it all up and move back to their village and farm. The more time they spend in cities , the more they realise how much freedom and happiness they have They’ve realised that even if they don’t make as much money in a farm, it keeps them happy and it gives them food.
theflyinghorse 7y ago
Of course we should have empathy. That being said why do you have 4-5 kids if you know you can't properly support them? That seems incredibly irresponsible.
- wavefunction 7y ago
  Family size may be a holdover or maintenance of a tradition that was once needed due to infant or child mortality and agricultural practices that require manual labor.

thrwe4234safd 7y ago

> They were attracted to these services by glamorous stories of cab drivers making 1500-2000$ a month on these apps. Adding more anecdotes about the insanity, papers a few years ago were rife with stories about Engineers quitting their jobs and turning into cab drivers overnight and making more money as a result! All this when OlUber fares were essentially costing the same as an Autorickshaw! It's little wonder that all the magic didn't last; one also wonders how much of this slowing down led to the current lack of demand in the Automotive sector. Most taxis here appear to be Suzuki Swifts, and Maruti-Suzuki has seen a big slow down as of late (but so have VW and other "premium" brands). The result of all this madness is that a large fraction of egregious cars that ply on roads in Bluru are taxis, which as a bicycle commuter, has become a nightmare to me personally due to their collective recklessness. Then again, they have helped tackle the annoyances from the lack of service and "extra" charges of the Auto unions and the insanely crowded public transport systems.

osrec 7y ago

It is a rather dire situation indeed. I saw a documentary on Uber drivers in India, and a few of them had been convinced to take on crippling levels of debt. When demand dropped (and number of Uber drivers increased) this eventually caused them to take their own lives.

TheCoelacanth 7y ago

Uber is the world's largest perpetrator of predatory pricing. They are practically begging for government regulation.