The growing popularity of app-based cab services like Uber and Ola has already eaten into the incomes of traditional auto and taxi drivers in Mumbai, but things are set to get worse.
Taxi and auto unions typically demand fare hikes from the government at this time of the year, to help drivers’ incomes keep up with inflation. This year, however, Mumbai’s kaali-peeli (black and yellow) taxi and auto unions are not pushing for a revised fare, for fear of losing even more commuters to cheaper aggregator cabs. This has left them in an unpleasant double bind: if they agitate for a hike in their fares, they could lose more passengers to aggregator cab services; if they don’t get higher fares, their already-dwindling incomes are likely to shrink even further over the next year.
Unfortunately for taxi and auto drivers, the situation will remain bleak until the regulations governing app-based cabs are designed to create a more level playing field for both kinds of public transport services.
‘Afraid to ask for a hike’
Base fares of Mumbai’s autos and taxis were raised by one rupee last year – from Rs 17 and Rs 21 to Rs 18 and Rs 22 respectively – and union leaders believe drivers deserve another one-rupee hike this year.
“It is true that CNG prices were reduced by Rs 1.6 per kilo during the last year, but auto insurance premiums have increased by Rs 3,000 a year – and insurance is mandatory for taxi drivers,” said AL Quadros, head of the Mumbai Taximen’s Union. “Besides, the general cost of living in this city keeps increasing every year, so our drivers really need a fare hike.”
Quadros’s union has, in fact, sent a basic proposal for a taxi fare revision to the state transport commission. “But we are not going to force the government to give us that one rupee hike,” he said.
Aggregator cabs are, of course, the primary reason for this passivity. “Ola and Uber have ruined the demand for our autos and cabs, and so there is no demand from our drivers to push for a fare hike this year,” said KK Tiwari, the leader of the Swabhiman Taxi Rickshaw Union. “Business is already bad, and drivers are afraid it could get worse.”
Aggregators versus kaali-peelis
App-based cab services have grown popular in Mumbai because they offer more comfortable, air-conditioned transport at rates that are often cheaper than kaali-peeli cabs. To a large extent, companies like Uber make up for these low rates through surge pricing, when per kilometre rates shoot up supposedly in accordance with high demand and low supply of cabs.
The effects of the recent surge pricing ban in Delhi are yet to be seen, but in Mumbai, auto and taxi drivers do not enjoy the benefits of anything akin to surge pricing – they have to stick to a fixed fare and face commuter ire if they charge more than the metre, irrespective of demand-supply dynamics.
For app-based cabs, the company takes a small cut of the fare paid by the commuter per ride, while the rest goes to the driver. Despite the relatively low fares and the cut taken by the companies, Uber and Ola drivers earn as much as Rs 25,000 or even Rs 60,000 a month, leagues higher than the Rs 8-10,000 monthly average that most kaali-peeli drivers earn in Mumbai.
“One reason for this could be that app-based cab drivers have captured the market for long-distance trips, and taxi or auto drivers are plying shorter distances than they used to,” said Dhawal Ashar, a senior project associate for urban transport at WRI India Sustainable Cities, a non-profit organisation advocating for sustainable urban transport.
So far, auto and taxi drivers seem to be losing the competitive race against huge multinational companies like Uber, even as they pay more to get the official permits that allow them to drive taxis. Uber or Ola drivers get tourist driver permits under the All India Tourist Permit regulations – permits that are relatively easy to acquire but that fall within a grey area. Taxi and auto unions, for instance, claim that tourist permits shouldn’t apply to cabs that ferry local commuters within the city. This is not explicitly clarified in the AITP regulations, and the government is still unclear about it.
“All in all, taxi and auto drivers are paying more for permits, uniforms, badges and having to deal with the police,” said Zainab Kakal, a project head at WRI India Sustainable Cities. “But their voices are not being adequately heard in this debate.”