To commemorate Shaheed Divas today, leaders of Taxi Unions across the country will be launching their own mobile application, to liberate their drivers from the restrictive and autocratic cab aggregators with deep pockets. In a symbolic gesture, 86 years after Bhagat Singh, Rajguru and Sukhdev were hanged in a Lahore jail, the cab unions have taken matters into their own hands in their fight against falling revenues and tough working conditions for drivers from the hyper funded cab aggregators like Ola and Uber.
Cabs drivers associated with Ola and Uber across 6 cities have already started using a ride hailing mobile app, that has been developed by Baxi for the respective unions in these cities.
This new app will offer fixed fares without surge pricing, and allow cab drivers to pick passengers directly from the road, outside high traffic areas like offices, malls and residential complexes. The fares will be regulated by a committee, comprising members of the respective unions in cities like Delhi, Ghaziabad, Gurgaon, Mumbai, Pune, Chennai and Bengaluru. These fares will be competitive, but will allow the drivers to earn a comfortable amount every month without artificial subsidies currently being provided by hyperfunded cab aggregators.
Drivers associated with Ola and Uber had recently been hit with a double whammy – after recovering extremely low rates from the passengers for their trips, they also had to share 20% to 30% of their revenue with the cab aggregators. Many of the drivers had bought new cabs, taking vehicle loans at high rates of interest, after being lured by the committed earning of 1 Lakh per month from the cab aggregators.
This high income was being artificially propped up by companies like Uber and Ola, using the money given to them by their respective VC investors. When their access to easy money went down in the previous year, they resorted to reducing the incentive structure for drivers, while maintaining rock bottom fares to retain their customers. Many of the cab drivers attached to these operators are now struggling to even pay the EMI on their car loans, and are forced to work for 14 to 18 hours in a day to maintain a basic level of earning. This has become a physical challenge for the drivers.
Ashutosh Johri, CEO and Co-founder of Baxi explains, “Our bike taxi business has turned profitable in the last few months. When we saw the struggle of the cab drivers, because of a flawed business model that was propagated by two of the most funded companies in the world, our hearts went out to them. We used our learning of the past year and a half in the business to tweak the partner mobile app to cater to cab drivers. They now have true freedom to work and earn at their own pace, without being dictated by unsustainable and artificial incentives or being exploited by their current employers. This will foster true entrepreneurship across the country.”
Within 24 hours of the app being released to the driver community, there have already been more than 1000 downloads, and the pace is picking up every minute.
Baxi has signed agreements with the respective cab unions stating, among other things, that they will not charge any commission from the drivers for using the app, for perpetuity. Baxi can do this given their low overheads, compared to existing cab aggregators, and the profitable nature of their core bike taxi business. They intend to charge the passenger a nominal fee for the convenience of booking rides using the mobile application, but not in the immediate future. They will also not be charged anything for hailing the cabs directly, from the kerb side.
Praful Shinde, leader of the taxi union at Mumbai said, “These foreign funded cab aggregators have been playing with the lives of our cab drivers, by arbitrarily reducing their earnings. We are now taking matters into our own hands, and are providing a solution for all the cab drivers to earn well, with dignity. If the cab aggregators accept our requests, then we will continue being associated with them. But they cannot take us for granted anymore.”
Baxi is also in the process of launching bike taxi services across the state of Uttar Pradesh, by leveraging its relationship with Bajaj Auto and TVS Motors. Commercial bikes will soon start running in 40 towns and cities, starting with Ghaziabad and NOIDA.