How Namma Yatri works: Can it break Ola and Uber's duopoly?

For every ride, two things are significant for the driver community, whether it’s a cab or an auto, what will the earnings be, and more importantly, what the commission charged by the app to the driver is.

Auto drivers Moneycontrol spoke to said that the commissions went up to 30 percent sometimes in the case of aggregator apps. This is also one of the reasons that customers often get asked by drivers to cancel the ride on the app and pay the driver directly so that the driver can pocket this commission and make a few extra rupees on that ride.

High prices charged by the apps along with the commission have led players like Ola and Uber to be at loggerheads with the Karnataka government as well recently, forcing them to revise their prices downward.

It’s no wonder then, that a ‘no commission’ proposition is immensely attractive to drivers in a city like Bengaluru.

Enter Namma Yatri

“App by the drivers for the people. 100% direct payment to drivers,” the Namma Yatri website says. Right now, once the Namma Yatri app is downloaded on the phone, you enter a pickup location on the app and a drop location, an autorickshaw arrives at your doorstep, and you pay him directly at the end of the ride either in cash or through UPI.

At the time of booking the ride, the estimate shown to the rider for the distance is the same that is shown to the driver as well. For example, if you are shown an estimate of Rs 110, the driver has the same estimate and is paid that much.

Where this varies from Ola and Uber — which started offering drivers estimates fairly recently only after customers always dealt with calls asking for the drop location and the price shown on the app — is that there is no commission to be calculated. Auto drivers, like A, say that the estimates they get on the other apps are not accurate many a time.

Unlike Ola, Uber, and Rapido, which are platform-based apps that control all aspects such as pricing, commission, who stays on the app and who’s kicked off and more, Namma Yatri isn’t platform-based. It doesn’t have the same licensing as the others either, which is partly why you can only pay cash to the driver or transfer the amount over UPI. No card-based online payments here, and Namma Yatri isn’t collecting any money to transfer to the driver later.

Ola, Uber and Rapido did not respond to Moneycontrol's queries.

With Namma Yatri described as a customer-friendly app by drivers in collaboration with tech companies, the gap it aims to fill is to provide services to commuters without any platform in the middle.

Executives of Juspay, who built the app, say that they took auto rides on the app to understand the problems of drivers.

“It is for the service providers, for all the unions and even drivers who are not part of any union. It is truly drivers who have to be enabled,” Juspay founder Vimal Kumar says. “We will be partnering with organisations and unions to learn and build a product with a participatory product-building approach.”

Simply put, he describes Namma Yatri as a software-as-a-service (SaaS) product for auto drivers.

Recently, Namma Yatri became a part of the ONDC network, or the Open Network for Digital Commerce — a decentralised, network-centric model where buyers and sellers can transact, irrespective of the platforms/apps they use.

Thampy Koshy, ONDC’s CEO, told Moneycontrol that mobility forms a bulk of the transactions that ONDC gets, and Namma Yatri is a big part of the chunk of those mobility transactions.

“If you look at the ONDC network in December, it was altogether some 30 transactions a day. Now as you can see, it is about 23000- 24,000 a day, of which nearly 1,000 is non-mobility and the remaining is mobility,” he says.

A reason he attributes to the higher adoption is that there is no physical inventory, like in other use cases like food and grocery, along with a desperate need.

Experience and exclusivity

“I'm satisfied with picking up rides through Namma Yatri, I actually have some pride riding through this app. Also, we know that there is no commission we pay for a middleman here,” said Satish Kumar, another driver on Namma Yatri.

Kumar hasn't faced any issues locating customers, except a couple of times a few months ago when the maps did not load to help display the pick-up point.

“A few meetings were held before the launch of the app. The only thing I suggested was a direct incentive for the ride we finish. We will not cancel so much if we get the right incentive,” he said.

An incentive to make drivers stick is something Namma Yatri is working towards. After getting into the auto, the app has an option for you, the rider, to input a referral code.

Unlike other apps where the referral code is to get new customers to use the platform, the referral code here rewards drivers instead — offering them an incentive to be on the app and accept more rides. For a certain number of rides on the app, he receives an incentive. Moneycontrol was unable to ascertain how much this incentive is.

“The referral program incentivises drivers to accept more rides, cancel less and serve you better by recognising and rewarding worthy drivers,” the note on the app reads.

Mahi, another driver on the app, had not got his referral code but he was excited to get one — as more incentives meant more money.

However, there is a catch.

Multiple auto drivers Moneycontrol spoke to said that the number of rides available for them to accept on the app is only high during peak hours — 8-11 am and 5-9 pm, with there largely being a lull during the other periods. On the other apps, they say that the number of options to pick up rides is pretty much nonstop.

This is visible from the open data dashboard that Namma Yatri has on its website: On a Sunday evening, it had 6,433 available drivers, and only 543 ongoing rides, or less than a tenth.

This is something Namma Yatri will have to solve: Along with getting more customers to use the app, at least 10 auto drivers told us they don’t exclusively use Namma Yatri.

Juspay’s Kumar is aware that the success and stickiness of his app depend on this.

Solving for sustenance

Running an app of this magnitude requires money and a continuous infusion of it. So far, Namma Yatri’s operations are backed by the Nandan Nilekani-led non-profit Foundation for Interoperability in Digital Economy (FIDE), and built by Juspay.

But now, the costs include engineering, R&D, marketing and even the cost of the maps used on the app. Google Maps is free for individuals but not for businesses. The plan is to use open-source apps, something they eventually will switch over to in order to save costs.

“We believe that efficiency is one of the key drivers. The cost per transaction has to keep going lower. Maps are one of the bigger costs,” says Kumar.

“We do have an ops team and we also automated a lot, and there is a lot of improvement which has to be done. At the current scale, they are able to manage, but for a larger scale, we are innovating,” he adds.

An app like Namma Yatri still needs capital to sustain operations and Kumar said the company plans to introduce a subscription model. He told Moneycontrol that the subscription, to be paid by the auto drivers, could also be in the form of a per-ride charge, just like a commission.

How would this work? While they are yet to figure it out, Kumar says it could be per ride, or could also vary depending on where they are getting the ride from. He gives the example of the ONDC network, where, in the event they have to pay someone else as well, it also has to be factored in.

“We want to make it as optimised as possible, transparent and give the benefit to the driver community,” he said. They say they will arrive at this amount after talking to drivers.

However, there are concerns that the subscription will turn out to be a masked form of commission.

“The intent is not to charge a commission. It’s currently going to be zero commission, but it is going to be like a prepaid recharge. What's the amount? The amount is something that we are working out,” he told Moneycontrol.

An expert working on the app said the subscription model will be like the MS Teams or Zoom feature. “Drivers just need to pay a small subscription charge to use the software... This is nothing like the commission where the drivers don't even know how it is calculated,” the expert said.

According to Namma Yatri’s website, the plan is to “set up an open collective with representatives from both citizens and the driver community to own pricing and policy-related decisions.”

This is the sticky wicket. Some auto drivers said they were not willing to pay a subscription, while others said it depends on whether it would be cheaper than what they now pay to aggregators.

“We never said that we want zero commission, even to Ola, Uber and Rapido. We felt that the commission charged was too high. If Namma Yatri caps that fixed price at a reasonable rate, I don’t mind paying,” said Razak Khan, a Namma Yatri auto driver.

Some drivers resigned themselves to the idea that if they have to pay, then there is no option. But others, like A, who didn’t know that such a subscription is being considered, questioned why it wasn’t brought in at the very beginning.

“It will sting if we have to start paying commissions here too. You can’t first show us that we can get the rides for free, and then ask us to pay,” auto driver A said.

According to Aswathy Dilip, the South Asia director for the Institute for Transportation and Development Policy, anything that people do or use has a cost, even the public transport system service provided by the government.“If the cost is not too high, that's when the drivers will stick with this app. If it becomes too high, then it will reach a place where they would use the app to get passengers and then they would cancel on them. This is not a good place for anyone to be,” Dilip said.

“The success of the app would depend on how they're able to serve their stakeholders best,” she says. “It's entirely dependent on how they would now learn from what didn't work as well for the auto drivers. And how they're going to give that edge over Ola and Uber by not having large cuts but by providing access to their clients and not making them work in inhuman conditions.”

Sathya Arikutharam, an urban mobility expert based in Bengaluru who also helped build Namma Yatri, told Moneycontrol that the ability to maintain the support of drivers is very important to sustain Namma Yatri, along with the ability of drivers to become more customer-focused.

“A driver cannot now cancel for no reason – it affects their own earnings and the trust of the app... However drivers have a sense of strong ownership, so cancellations are very minimal.”

What is the rider experience like?

Bengaluru residents who have used Namma Yatri since its launch said the app needs improvement, especially on payment options. Some have had a smooth experience so far.

“Location is almost accurate, like Ola-Uber, but no post-paid or card payment facility yet,” a regular user of Namma Yatri told Moneycontrol.

Another rider said the prices are lower than what Ola, Uber and Rapido charge.

“Namma Yatri is a big yes for me as there is no commission in between… More users need to use it for it to achieve scale for further improvement,” said Anand Kumar E, who uses the app daily.

However, riders have complained of long waiting times.

“The only problem was that none of the drivers ever confirmed a ride, despite waiting for over 30 minutes,” said 24-year-old Ratika Rana, who uses autos to commute to work.

“The app often takes very long to load and the interface is very slow… Even if you decided to book an auto through Namma Yatri, you would find it very difficult to find an auto in your vicinity. There's a very high rate of failure while booking, even when it's not rush hour,” Shreya Gupta told Moneycontrol.

Addressing tech challenges and the road ahead

To gain a significant market share in the space that is dominated by players like Ola, Uber and Rapido, Namma Yatri will have to focus on app development and user experience while also working on reducing the cancellation rates. To enhance its tech, the platform has charted a roadmap for the next 6-12 months, which includes low-cost and effective options when open-source maps can’t be used.

That may give the Namma Yatri app a better chance of thriving than the app that the Kerala government introduced two years ago. In 2021, the Kerala government was keen to launch a mobility app called Yatri for autos and cabs and interconnect all mobile transportation apps in the state, allowing passengers to also book ferries, metros, buses and even rent bicycles. The app also promised to help find parking spots and EV charging stations. Though the Yatri website says that many drivers registered, the app did not take off or gain as much attention as the one in Bengaluru.

While the subscription model is still being discussed for Namma Yatri, Juspay has called for developers and marketing experts in Bengaluru to volunteer for working on the app. The company organised a hackathon for this in Bengaluru from March 28 to April 30. “This is an open initiative to encourage building innovative solutions to solve mobility issues. Citizens can participate and propose solutions to improve transportation efficiency, affordability, and sustainability,” the hackathon description read.

ITDP’s Dilip called for state-level regulations and said it is important to address driver concerns upfront and see how they integrate with the overall sustainable mobility ecosystem that we want to create.

Namma Yatri has its sights set on a bigger goal — multi-modal transport. Integrating multiple forms of conveyance including buses and cabs onto one app, so that everything can be accessed from one place, maybe even to suggest all the ways one can get from point A to point B.

With the app on ONDC as well, the trajectory of Namma Yatri's success will be keenly watched.