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Sunday, November 01, 2015

Uber and OLA - The New Revolutions in Transport

On a sunny (I'd rather say hot) Wednesday afternoon, I was waiting for a bus to get a ride to a friend’s place nearby. As always the frustration to wait for public transport, the convenience of having AC in a cab and laziness to walk last few metres after getting down a bus influenced me to open apps that are present under “travel” category in my phone. So I opened Uber. Requesting for a ride, the driver arriving there and me getting in to the car hardly took 5 minutes from the tap of a button. The conversation I had with the driver influenced me to write this column. 

After I got in, the first thing he did was to confirm my Identity and started to write my name in a book with the odometer reading beside it. I asked him the reason for doing it. He said in elegant English, “Sir, I have been getting wrong readings in Uber dashboard while I have been riding longer distances than what is being showed. So I wanted to confirm whether it is any technical error and wanted to report it.” I was offended when he said he found fault with technology. Geek in me came out brashly and explained him how navigation works and said that mighty Google powers Uber’s backend of navigation. He listened patiently and said to me, “Sir I have been getting cancelled rides and some non payment issues because of combination of wallet and cash. I just want to make sure that there is no foul play. Nothing against Google or Uber.” There’s a shiny Asus phone plugged and set in a stand on the car. I asked him whether he purchased it. He said that Uber gave it to him. “I was offered Samsung and Asus. I hate bloatware in Samsung and touchwiz is laggy. So, I have selected Asus.”

Then our conversation moved from technology to revenue models. I asked him, “How do you make profits from Uber? We pay a mere Rs. 7/Km and is it even viable for you?” He smiled and said, “Sir, apart from whatever you give us, we get an incentive of Rs. 100 or Rs. 125 based on the type of car whether it is a Sedan or a Hatchback. In addition to that for each hour we login, we get Rs. 200 irrespective of whether we get rides or not. I asked him whether those incentives remain forever. He said that starting from 1st Nov, prices of Uber are going to be increased with all the incentives for drivers cancelled and the new price is going to be Rs. 16/Km and are going to serve sub-urban as well. I was surprised and agitated at the same time and said, “How could they do that? Do they even realise that people are going to desert them if the prices hike outrageously high?” Then he said to me, “Sir, you can’t desert us. You know that, we know that, Uber knows that. Will you now after enjoying the private rides go back to footboard rides on a bus? Uber went as far as to rent Audi s and Benz s for Rs. 25000 a day from top celebrities only to attract people to Uber. They are even showing losses in the profitable counterparts only to provide free rides and promos and push this concept aggressively in India.* Bitter truths are hard to digest and I countered him to back his claim. He replied wryly, “Surge pricing. Surge pricing is a strategy to test your spending capabilities. There are 20 lakh cars in Hyderabad which are registered to Uber and let’s say, 25% of them are offline. There would still be 15 lakh cars on roads and rarely will there be a deficiency. Even at the time of surge where the prices would go 3 X or 3.5 X, people are not stopping. And recently when Uber started charging Rs. 18/Km after 16 Km, it didn’t deter people from taking a ride.” Now I didn’t have anything to speak. 

My destination arrived and while he was pressing “End trip” on his console, I asked him, “How much do you make?” He replied “Rs. 65000 - 80000 a month.” As I readied myself to pick my bag I have promised it to be the last question and asked him “What is your qualification?” “M.Com.” Understanding the bafflement on my face, he continued speaking “I didn’t want to work under anyone. I love driving and wanted to be my own boss and thankfully technology is allowing me to do it.” 

If technology is allowing a man in his 30s to follow his passion, giving him financial freedom, and is encouraging public to lead a better way of life, I’ll indeed call it Revolutionary in bold and italics :)

*I was unable to confirm the claim.

NOTE: The views expressed here are those of the author's and do not necessarily represent or reflect the views of DOT as a whole.

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