Few months back I had written about my conversation with a dissatisfied Uber driver (Srini) who was not very happy with his earnings . (Read the article here). It was not sustainable for Srini to continue driving to support his family and pay the installments for the car debt. I concluded the article with my views on oversupply and need for regulation.
Fast forward it today , Srini’s grouse has become a nationwide protest of Uber and Ola drivers. Their complain is simple; they are not earning enough. It is easy to understand that the drivers are sending a signal to their respective taxi-aggregators and unassuming populace of India that something is seriously wrong, repair it. While we were busy celebrating the emergence of sharing economy , efficiency and a possibility of giving-up car ownership , there was an army of distressed drivers planning a protest.
The strike is a rude awakening, and it was pretty much an eventuality, here is why: Since the good old days there has been a steep rise in supply of capacity. Uber and Ola have aggregated pretty-much anything and everything which moves on the roads. Aggregation of Scooters, Rickshaws, Buses have suddenly unlocked huge capacity. A nail in the coffin was pooling. While all these modes added capacity and efficiency, Uber and Ola’s core and original product of cab hailing service took a hit. There were fewer rides for the drivers and hence less revenue. Nevertheless, Uber and Ola continued adding revenue streams.
Back in the good old days (2014-2015), I was convinced that investment in a car for partnering with Uber can give 100% yearly return on the capital. That was the time when headlines like Uber Drivers making 1.5 lac per month , true or otherwise, made us feel sorry about our expensive education and careers.
Uber and Ola’s core and original service will become premium. Only those who could afford it will take it. Only few drivers in selected pockets of the metro-cities will be able to earn, the rest will write-off their assets.