Moneycontrol
Mar 20, 2017 08:31 PM IST | Source: Moneycontrol.com

COMMENT: Uber CEO argument with cabbie in US reveals similar worries here

Uber CEO‘s argument with a cab driver in San Francisco echoes similar frustrations being felt by cabbies in a Delhi, Mumbai, Hyderabad or Bangalore. And there is no easy way out for lakhs of drivers attached with taxi apps.

COMMENT: Uber CEO argument with cabbie in US reveals similar worries here

Moneycontrol News

Uber CEO Travis Kalanick’s argument with Fawzi Kamal, a cab driver in San Francisco caught on video this week shows similar frustrations that cabbies in Delhi, Mumbai or Bangalore are having with the taxi app.

After attaching cars with Uber and garnering huge incentives since 2015, the drivers are now clueless. As they open their app based dashboards and bank account statements each week, they wonder about falling incomes, decreasing fare rates, rising commissions and lesser demand across Indian cities.

In protest, the drivers attached with Ola and Uber called a strike across cities of Delhi, Hyderabad and Bengaluru last month.

The strikes were as expected unsuccessful. The taxi aggregators Ola and Uber did not back down on driver’s demands of stopping oversupply, reducing commissions, increasing fares or banning carpool. The drivers who were left to fend for their livelihood came back to work even as the companies applied surge pricing to entice drivers to come back to work.

There is no way out if a driver wants to get out of this mess. Drivers say that often they are stuck with an illiquid asset once a car is bought on loan, and attached with a taxi aggregator. The only options out of it is to sell the cab at a loss or keep driving the cab with the incomes falling further, often completely dependent upon the changes in the app on a regular (read weekly) basis. Opening a taxi business remains a non option as nobody can match up the fare rates offered by heavily funded taxi apps.

The incentive schemes have become more stringent and commissions have risen to over 25 percent per ride. Most drivers Moneycontrol talked to said they end up making just Rs 1 as profit per kilometre after deducting all overheads.

A cab usually runs for over 400 kilometres in a city such as Delhi. Thus, the cabbies end up making just Rs 12,000 as earnings after deducting all expenses. This is even lower than the Rs 15,000- Rs 18,000 per month salary a driver earns attached with a corporate, hotel, or a travel operator.

The fate of taxi drivers is now directly dependent upon the investors who fund these aggregators. In wake of falling funding, most aggregators end up increasing commissions than reducing fare rates, which ends up hurting drivers and cab owners more than passengers.

The public has an option to turn back to using subways, auto rickshaw, regular taxis and buses. The drivers attached with the taxi apps have nowhere to go.

The argument of Uber CEO with the cab driver

In a dashboard cam video obtained by Bloomberg News, a cab driver in San Francisco Fawzi Kamal is seen arguing with Uber CEO Travis Kalanick over falling fares.

“You chose to buy everyone a ride. I lost USD 97,000 because of you. I'm bankrupt because of you,” Kamal is seen arguing with Uber CEO Kalanick.

Last month Moneycontrol spoke to drivers in Delhi who shared a similar sentiment.

"We can't work at such low prices. We are not demanding anything unreasonable, we just need these companies to provide us prices fixed by the government and reduce commissions,” said Chandrakesh, a driver with Sarvodaya Driver Association of Delhi, who went on strike against his falling income.

Kamal also echoed a similar sentiment directly with Kalanick.

“You’re raising the standards, and you’re dropping the prices. We could go higher and more expensive,” Kamal told Kalanick.

Kalanick, however, retorted back. "You know what? Some people don't like to take responsibility for their own s---. They blame everything in their life on somebody else. Good luck," he said getting out of the car.

Uber’s CEO apologizes after argument with the driver

Uber CEO Travis Kalanick sent the following note to all ‘Uber employees’ Tuesday evening.

“By now I’m sure you’ve seen the video where I treated an Uber driver disrespectfully. To say that I am ashamed is an extreme understatement. My job as your leader is to lead…and that starts with behaving in a way that makes us all proud. That is not what I did, and it cannot be explained away,” he said.

“The criticism we’ve received is a stark reminder that I must fundamentally change as a leader and grow up. This is the first time I’ve been willing to admit that I need leadership help and I intend to get it,” the CEO said.

“I want to profoundly apologize to Fawzi, as well as the driver and rider community, and to the Uber team,” he added.

However, what Uber drivers across the world may appreciate more than an apology is to listen to their concerns and not squeeze them to the hilt, in the mad race to kill competition.

(This is an opinion piece)
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