Saturday, December 9

Ola & Uber Fares Rose up by 15% in Last One Year

With the increasing demand of Ola and Uber these days, an average ride cost on Ola and Uber is up by 15% over the last one year. This has been presented as per estimates by research & advisory firm RedSeer. The company said this comes on top of a 10% increase in 2017.

However, the figures that have been stated are a national average, and the actual changes may be different for different cities. The report did not provide the city-wise figures as Bengaluru users have reported significantly higher increases.

According to the reports, the average cost per ride on these cab-hailing apps has risen to Rs 220, compared to around Rs 190 last year. Also, the incentives for drivers, which was used for several years to attract drivers to meet rising demand, saw a drop of over 30% in the last one year, which also led to the strike of Uber and Ola drivers.

It was quite clear why the drivers of both Uber and Ola in Delhi and Mumbai went on strike. They were protesting against falling incomes and extra hours to get incentives.

The average income of the cab drivers, including incentives but excluding EMI payments for their vehicles, was more than Rs 30,000 in the second quarter of 2016, however, at present, it is around Rs 20,000 a month. Rising fuel prices also made a dent on their take-home income.

When the company came into existence in India, the incentives were about 60% of booking value and now they have come down to 14-15%. The study also revealed that an increase in fuel prices would have increased the fuel and maintenance expenditure of drivers by around 700 per month since August.

The decreasing driver incomes and increasing customer costs are a reflection of Ola and Uber’s efforts to improve margins. Both were making heavy losses, but those losses have reduced a lot now. Both of the cab aggregators together account for about 3.2-3.5 million daily rides.