New drivers are not signing up with Ola & Uber The slowing growth in fleet sizes is emblematic of a market that is maturing and stabilising after nearly a half decade of frenzied growthShashwati Shankar | ET Bureau | June 01, 2017, 07:35 IST inShare A large number of taxi drivers have quit Ola and Uber and not many new ones are signing up, but that might be a good thing. Analysts and company executives ET spoke with said more than 10,000 drivers have left Ola and Uber in Bengaluru alone in the past two years, as the companies gradually lowered the heady incentives they used to lure the drivers. Also, driver registrations plunged from 300-350 a day in 2016 to 40-50 this year across Bengaluru, Mumbai and Delhi. Even so, analysts said, the slowing growth in fleet sizes is emblematic of a market that is maturing and stabilising after nearly a half decade of frenzied growth that was beginning to affect operations. “While the supply (of drivers and vehicles) has dropped from 2016 to 2017, it is stabilising and the market is slowly showing signs of maturing,“ said Jaspal Singh, partner at Valoriser Consultants. “Newer drivers coming on board are aware that the incentives and salaries offered are lower than what they were last year.They are more prepared to work longer hours for lower wages in the pursuit of owning a car in the long run.“ Many of the drivers who have dropped off the platforms were earning ` Rs60,000 to 1 lakh a month in fares and incentives, he said. Ola and Uber did not immediately reply to emailed queries from ET. Currently, Ola has about 550,000 drivers on its platform across 102 cities and Uber India about 400,000 drivers in 29 cities, according to the companies. Analysts, however, estimate that not more than onethird of these drivers are likely to be active. Ravi Shah, a Delhi-based driver, said he returned to his previous job as a personal driver after plying for Ola and Uber for about one-and-a-half years. “It was too much of a burden. I prefer working for a family as a full-time driver, getting meals and a weekly day off. I still earn more than . 15,000 a month, plus festival ` bonuses, while enjoying a much better quality of life,“ said Shah. Several of his friends, he said, have returned to working with other taxi companies, independent outdoor rental services, or as full-time domestic drivers. For Ola and Uber, though, demand continues to increase as customers remain hooked to the ease of tapping their mobile phones to haul a cab. This, even though fares have increased by at least 15-20% across cities, said an analyst, unwilling to be identified. The taxi aggregators “are experimenting with different prices in different citi es to see what the consumer is willing to pay. This is something that would happen independently of supply“, said this analyst. “The focus is on profitability.“ An Ola executive, speaking on condition of anonymity, said the driver exits and fewer registrations have not had much impact on the company. “Now the market is maturing. The drivers who are likely to stick are often younger drivers who were working at even more unsa tisfying tisfying jobs and are willing to put in the additional amount of time so they can be independent car owners after working four-five years with Ola, Uber or both,“ this both,“ this executive said. Ram Vikas, a 24-year-old driver with Uber, was earlier a delivery boy for an ecommerce company. He says he switched to driving a taxi with the hope of owning a car by his late 20's. “I was earning around ` . 20,000 a month as a delivery boy.With Uber, even though the hours are long, I will get to own a car in a few years,“ said Vikas. “That will make my parents in the village proud and I can start saving money after that.“ Link http://tech.economictimes.indiatimes.com/news/internet/new-drivers-are-not-signing-up-with- ola-uber/58937444 Radio cab businesses face tougher Mumbai ride; search for viable business model on G Seetharaman, ET Bureau Mar 9, 2014, 10.52AM IST Avinash Gupta would have stayed with Meru Cabs had it not been for the drivers' strike over a year ago and his car catching fire. He ended up owing the company, whose car he had driven for four years in Mumbai, nearly Rs 20,000; he couldn't pay up and was forced to leave. "Even if I could pay some of it, they would take me back. They have a good system and their rules haven't changed," says the native of Allahabad who has been a cabbie in Mumbai for nearly two decades now. He now drives a Cool Cab taxi, an air-conditioned version of the city's black- andyellow taxis, and makes Rs 700-800 a day, the same as he used to make at Meru, but by putting in longer hours. The strike, called by Meru Chalak Sena, a union of drivers, and which lasted over two weeks in January and February 2013, put a big question mark over the company's future since Mumbai accounts for a third of its fleet, now at 6,500 cabs. "Politicians wanted it and we couldn't do anything," says Gupta. Meru did not recognize the union, backed by Shiv Sena. Sambhaji Bhosale, who was a Meru driver and, as general secretary of the union, led the strike, says the drivers had legitimate demands. Among them was exemption from the daily subscription fee on their weekly holiday, which the company did not accept. "We did not concede one inch," says Siddhartha Pahwa, chief executive of Meru. Bhosale says they had to put an end to the strike because it was hurting the drivers. Leaving Trouble Behind In the 13 months since the strike, Meru has not faced any trouble from its drivers which, Pahwa says, is due to a rise in the frequency of Meru's meetings with its drivers. "We now have some engagement activity or the other with them once in two months, while earlier it was just once a year." Pahwa credits these activities with bringing down attrition among its drivers to 10-11% in the past one year compared with about 25% earlier. What's more, the eight-year-old company has added Jaipur and Ahmedabad to its network since the strike, taking the number of cities it's present in to six, with another three to be added in the next six months. Its fleet comprises sedans like Toyota Etios, Maruti Dzire, Tata Manza and Mahindra Verito. Meru seems to have turned the corner, if Pahwa is to be believed. The company has been cash flow-positive for the past 18 months and will post its first full-year net profit in 2014-15. The company more than halved its net loss to Rs 31.1 crore in 2012-13 from the year before and grew its operating profit more than eight times to Rs 23 crore, while revenues rose only 9.3% to Rs 176 crore. However, top line growth this fiscal year is expected to be three times as high. The company is looking at customer revenues of Rs 425 crore, a growth of 32%. ET recently reported that India Value Fund Advisors (IVFA), which has reportedly invested nearly Rs 200 crore since 2006 for a 75% stake in Meru, is looking to divest its stake. Neither Pahwa nor Pramod Kabra, partner, IVFA, commented on the news. When asked why IVFA has stayed invested in Meru, founded by Neeraj Gupta, for eight years, which is unusual for a private equity firm, Kabra said: "Our investment horizon is typically five to seven years. Specifically, in the case of Meru, unlike our other investments, we invested at a fairly early stage. The Meru business model was developed post our investment. Hence, here our investment tenure is longer." Taking Different Routes Meru, New Delhi-based Mega Cabs and Easy Cabs together control about 70% of the Rs 1,200-crore radio cab market, according to Valoriser Consultants. The firm estimated the total number of radio cabs in the industry at 15,000 though some put the figure at 20,000 (see Radio Cab Industry in Numbers). The taxi market in India, in comparison, is about 4,00,000 cabs and has revenues of Rs 11,000 crore. "Problems like strikes happen when you are establishing a trend. The rest of 2013 was trouble-free for the industry," says Kunal Lalani, managing director of Mega Cabs, which has a fleet of 3,200 cars in seven cities. The industry, as can be expected of a business which is less than a decade-old, is still evolving, with players tinkering with their business models and launching new products. The genesis of the industry was in the ownership model in which the radio cab operator owns his fleet and the driver pays a subscription fee of Rs 900-1,300 a day or 20-30% of his fares (see Business Models). Companies say a driver, if he does not turn down business and works 26 days a month, should take home Rs 15,000-20,000 a month. About three years ago, companies like Meru started offering drivers the option of owning the car in two to four years by paying the equated monthly instalments (EMIs) for the car in addition to the subscription charge.