Taxi fares: Increased fuel costs, fewer stops that force most taxi drivers to leave

Bombay | Bangalore: Frequent taxi users face trip cancellations, higher fares and longer waiting times. They also have to deal with drivers who refuse to go to certain locations or who charge an extra fee for turning on the air conditioning.

In short, commuters are getting a rough deal, such as a steep rise in the price of methane and the cut in incentives by taxi aggregators such as Olà Other Above made it impractical for drivers to maneuver, experts said.

“Nowadays it takes at least 15-20 minutes to catch a local ‘kaali peeli’ (black and yellow) taxi,” said Meena Shah, a Mumbai resident who uses these taxis for short-distance commuters. “Now I find myself walking half the distance before taking a taxi.”

The Covid-19 pandemic has had a multiplier effect on the commercial passenger vehicle and mobility sector. A cycle of lockdowns and a weak recovery in demand have closed many drivers and vehicle owners, leading to a severe shortage. Regular customers soon began to opt for personal vehicles or alternative modes of transportation.

“We prefer to take short trips as longer ones often mean not receiving customers for the entire return leg. The higher prices of methane also make it operationally impractical, ”said Usman Sheikh, a driver based in Mumbai.


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Crunchiness of the offer

There is, of course, a huge increase in demand in the business commuting and weekend travel segments, but a major supply crisis has hit the passenger taxi / commercial vehicle segment hard, Neeraj Gupta said. founder of Meru Cabacquired by M&M last year.

Motorists in Bengaluru dropped to 45,000 from 100,000 in the pre-pandemic period, said Tanveer Pasha, president, Ola Uber Owners and Drivers’ Association.

Pasha values ​​this from posts about driver groups on social media operating in various areas of the city. “Many have returned to their villages and are engaged in agriculture and other activities,” Pasha said. “Driving for Ola and Uber is no longer profitable.”

Case in the recordings

According to data from the Vahan government database, there has been a sharp decline in new commercial taxi registrations in the past two years.

Overall registrations dropped 28% to 65,221 units in 2021.

Among the four metros, Delhi recorded a 43% decline to 1,263 units, Mumbai dropped 4% to 2,327 units, Calcutta recorded a 68% decline to 224 units, and Chennai recorded a 39% decline to 447 units. .

So far there has been a further decline in registrations over the year.

The number of drivers who logged into pre- and post-Covid aggregation platforms in the four-wheel segment shows that it has grown by just 0.07%. However, this number has doubled among drivers accessing auto rickshaw platforms, according to data from Vumonic Datalabs.

This was the same for the number of rides.

Although there was a decline during the second wave of Covid-19, ride-hailing activity again surpassed the February 2020 level in September 2021.

Auto rickshaw rides increased between September 2021 and April 2022, and rides in the four-wheeled taxi segment grew marginally over the same period.

While drivers of Mumbai’s famous “black and yellow” taxis are clamoring for a price revision, “we believe fewer passengers will use taxis at the premium rate,” said Shashank Rao, president of the Taxi and Autorickshaw Union.

Methane prices have risen 25% in the past two months, he said.

Therefore, «we asked

to subsidize the CNG tariff for motorists and taxi drivers as public utility vehicles, “said Rao.

The problem isn’t limited to Ola and Uber drivers alone.

Fewer than 30,000 taxi drivers are currently in service compared to 80,000 a few years ago, mainly due to unsustainable fares.

Many taxi drivers do not renew their contracts and choose other professions, said Nikunj Sanghi, a major car dealer.

“It is a complex landscape. The offer must be increased with higher incentives, which will attract more drivers, ”said Madhav Pai, program executive director of the WRI India Ross Center.

Job benefits are needed

The Uber experience hasn’t been as “magical” as it would have wanted lately for both riders and bikers, a senior executive said.

“Drivers shared earnings concerns in the wake of the rally fuel prices, long distance withdrawals and payment deadlines. Bikers complained that drivers canceled trips or didn’t want to turn on the ACs, ”Nitish Bhushan, head of central operations, Uber India and South Asia, said Thursday in a blog post.

The ride-hailing app Uber has raised fares by 10-15% in more cities to boost driver earnings due to rising fuel tariffs, among a number of measures such as flexibility on payments and visibility of the destination to allow partners to continue operating on the technology platform.

Uber drivers will be paid more if they travel farther to pick up a passenger and can choose the payment method – cash or online – for a ride.

Ola has also introduced some of these changes. The company did not respond to ET’s questions.

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