Cab Reality: The Taxi Battle Goes Much Beyond Its Fare War

Last week, Bengaluru Transport Commissioner got many angry visitors, taxi and auto unions who wanted the commissioner to stop their ‘competition’ from decreasing prices.

In Chennai, a group of taxi drivers barged into the office of another Taxi service and protested claiming the cheap rates offered by the competition was destroying their livelihood.

This is what the latest e-commerce battle is all about. New-age online radio cab services have waged a war on traditional transport operators in India with numerous offers and competitive prices. These three companies that are competing to demolish other taxi services, are also in constant competition with each other.

Taxi companies like Ola and Uber offer discounts of upto 50% to its first time users. Ola allows its app users to pin-point the location of a cab-driver which is further categorized depending on the kind of cab.

A taxi driver who recently joined Uber spoke to INNLIVE and said, “Uber gives discounts to passengers, but does not eat into the earnings of the taxi drivers. For the first booking, Uber actually charges double, but gives a discount for a certain period of time to its customers. For instance, if the charges for a first time booking total Rs 300, the driver gets to keep his share, but Uber bears the discount given to the customer” he said.  

Uber services were initially limited to people with credit cards which was not in compliance with the regulations set by the RBI. Now, through Paytm wallet-payment system in place Uber allows people to top-up or add money to their virtual wallet accounts with Uber.

Taxi4sure expects drivers to pay them a commission of 15%, Ola 7-8.5 %, Meru is 15% and Uber is 20%. With companies like Meru, the waiting period to get a passenger is quite high. The same was the case with the firm he was with earlier, according to the taxi driver who previously worked for Taxi4sure.

“In a day, I might earn not more than Rs 1,500 and after deducting the commissions I only get around Rs 1,000. The main problem with these companies is the extra travel time of six-seven km that we have to put in to pick up a passenger” said the taxi driver.

With Uber however, he says it is different. He says that “Uber is more popular among drivers as the wait time to pick up a passenger is not more than 15 minutes. I work from 6 am to 12 and I can earn Rs 4000 if which I get to keep anywhere between Rs 2000-2,500.”

At the user end, people have expressed mixed feelings towards these app-based taxi services like Ola and Uber since they take up surge pricing techniques during peak travel times. This globally-used technique is based on the basic concept of demand and supply. Though this concept ensures availability of cabs, it further escalates the amount to be paid for these cab services depending on the time of the commute.

All the taxi drivers are given smartphones, Uber and Ola gives smartphone for free, while Meeru and others ask the drivers for a deposit.

“Almost all taxi services now use GPS devices which operate through a mobile phone. Uber and Ola are more driver-friendly than Meru or Taxi4sure despite the lower commission charges because they get more passengers, the amount of time and distance they have to cover to pick up a passenger is lesser, and they do not have to pay a deposit for the mobile phone which contains the app which connects them with the taxi company”, says Mohan, a taxi driver.

The new age taxi operators are competing to win over customers and drivers. The discounts provided could be described as ‘unbelivable’ or ‘ridiculous’. As they compete to lower the charges further, the question is for how long. But as of now one thing is clear, these companies want to take over the market, and demolish any competition.