What You Should Know About The Ola-Uber Strike

It’s been a week since drivers affiliated to cab services Ola and Uber launched an “indefinite” strike. Not just in Bengaluru, cabbies in Delhi and Hyderabad have joined hands too, and are making similar demands. But, what are these demands exactly? Here’s what you need to know about the strike.

The primary bone of contention between the two parties is commission. Protesting drivers are livid with the commission charged by the two cab services, who are said to have increased it from 10 per cent to 25 per cent in the last few weeks.

Ola and Uber have also reportedly stopped providing "incentives" to the drivers. Incentives have played a significant role for both services in expanding their markets in India.

Both Ola and Uber had entered the market by offering fares as low as Rs 6 per kilometre while the base fares set by the government are Rs 19.50 and, for non-AC cabs, Rs 14.40. The companies made up for the shortfall by offering drivers incentives. The incentives were calculated on the basis of either the number of trips completed during peak and off-peak hours or the distance covered. This incentive has been reportedly slashed down heavily. Most drivers banked on incentives for their earnings.

Seeing a cut in incentives and a hike in commission, drivers have seen their incomes fall drastically. Besides, new cabs have been added almost on a daily basis, resulting in fewer rides for existing drivers – another problem area for the cabbies.

It seems like Uber and Ola are caught between the devil and the deep blue sea. The two cab services made inroads into the market because they slashed prices. Now, they risk losing customers if they increase tariffs. At the same time, they cannot hope to make money if they continue passing incentives and abolishing commissions.