Will Ola & Uber hurt its micro entrepreneurs?
Drivers take away income has some down to 1/3rd of what they earned before. They are in deep trouble.
Drivers take away income has some down to 1/3rd of what they earned before. They are in deep trouble.
Ride sharing economy is facing threat.
Uber may retreat from India as well, as it did from South East Asia, China and Russia.
Delhi-NCR is Ola-Uber’s largest market. Uber operates in 29 cities in the country as compared to Ola’s operations in 110 Indian cities.
As both the companies are aiming to become profitable, millions of car owners/ drivers are facing the brunt.
Why are they reducing incentives and income?
Both are operating at huge losses.
- In FY 16 Ola’s consolidated loss before tax was INR 2300 crores, while revenue was only INR 758 crores.
- In FY 16 Uber’s adjusted net loss was nearly INR 20,000 crores.Investors want them to turn profitable, which either leads to higher fares or lower incentives.
Softbank owns shares in both. So, it will like to minimize the losses.
What does it mean ?
Loss of business for drivers.
- First they could earn INR 60k per month.
- Then it came down by 1/3rd to INR 20k/ month.
- Together they employ 15 lacs drivers.Burden of paying monthly EMIs. Most drivers have bought cars on loans. They will have to keep paying the EMIs.
Lack of future jobs. Since most drivers do not have other skills, they will not get jobs.