Apologetic Uber says drivers still earning well

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Uber India president Amit Jain on Friday apologized for the disruption that its riders and drivers had experienced over the past few weeks. He admitted that driver incentives had been reduced to build a more sustainable business, but said that 80% of the drivers who are online for more than six hours were still making between Rs 1,500 and Rs 2,500 a day after Uber’s commission (25%). Jain was responding to the strikes by Uber drivers across the country . Drivers have been protesting the reduction in incentives. They have also said that the increasing numbers of cabs on the platform have reduced the number of trips they get in a day .

The driver earnings mentioned by Jain indicates monthly earnings between Rs 45,000 and Rs 75,000. But many drivers have EMIs on their cars that would shave off about Rs 15,000 a month.At the lower end of the earnings, the fuel charge and repair & maintenance are likely to be another Rs 15,000. So that leaves the driver with a profit of around Rs 15,000. Experts say that is not a very attractive earning, given that households today pay over Rs 15,000, and the work involved is typically much less than for an Uber or Ola driver who makes that much.

For those earning Rs 75,000, the profit would be significantly higher. Jain sought to make a difference between a private driver and an Uber one. Uber, he said, is at heart an entrepreneurial activity .”Earnings are not one size fits all,” he wrote. He said at the lower end, drivers are more likely to drive for shorter periods of time, drive outside of peak demand periods, drive in specific areas in their city and more frequently reject rides. At the higher end, he said, drivers are more likely to prioritise driving at peak demand periods when incentives, and by extension earning potential, are highest, drive the entire city and accept all, or close to all, incoming ride requests.

Jain said that incentivising drivers was important for the service to work, but “we also need to consider affordable prices for riders that allow the service to grow and drivers to know when they switch on the app, there will always be people looking for a ride.”

Uber, he said, rolls outs incentives and promotions to introduce the service in new cities. But he said that once there’s sustained high demand from both riders and drivers, “we can shift from startup mode to a more sustainable business model and begin reducing higher levels of incentives, and invest more in drivers and our products for the long term.”