BluSmart Collapse Leaves 10,000 Drivers, 800 Employees Jobless Overnight

As EV ride-hailing startup BluSmart’s rough patch continues, with allegations of fraud falling on the founders, more than 1,000 drivers, who were rendered jobless overnight, are set to stage a massive protest at New Delhi’s Jantar Mantar on Sunday, May 4.

The protesters are expecting a major turnout at the Delhi rally. Inc42 has learnt that some drivers from Bengaluru, too, are likely to show up. BluSmart used to operate only in Delhi NCR, Bengaluru and Mumbai, with majority of the drivers coming from Delhi NCR. 

The protesting drivers have invited Dalit leader Ramdas Athavale and members of various other parties to attend the rally, sources told us.

“It was a kick in the gut for at least 50,000 people,” one BluSmart driver told us on the sidelines of a similar smaller protest in Pitampura on April 30. “The founders are the culprits, but we are the ones to pay the price.” 

The fiasco in mid-April, when BluSmart shut its services, is said to have resulted in nearly 10,000 drivers being left jobless. Another source added that the drivers are in many cases breadwinners for their families, with an average of five members in each family. 

“We are left with no choice but to raise the voice. Someone has to help us,” we were told by another driver who has been on the BluSmart platform for more than a year. 

What The Drivers Demand

One of the major demands of the protesting drivers is that the government should intervene in the BluSmart crisis so that there’s a way to help the drivers sustain their livelihood. At the very least, the government can intervene in Delhi NCR, where a majority of BluSmart drivers were working. 

“The central government will launch Sahkar Taxi. Why don’t they take over BluSmart and help us get our jobs back?” wondered the second BluSmart driver Inc42 spoke to.

India’s Home Minister Amit Shah had in March announced the plans to introduce Sahkar Taxi to compete against the likes of Ola, Uber and Rapido. Sahkar Taxi will run on a zero-commission model, which means that the drivers will get the whole fare as it shows on the meter, unlike in the case of aggregators, Shah said. 

In addition, the protesting drivers also claimed the lease on the existing 8,000 cabs on BluSmart should be handed over to them, so that they can eventually own these vehicles and continue to ply their trade. 

While elaborating on their demands, the drivers said that cab aggregators also need to inform drivers and part-time workers in advance in case they expect a disruption in operations, and drivers must be given a severance pay in such cases. 

The Plight Of The Drivers

The life of BluSmart drivers came to a standstill when, on March 17, the BluSmart driver app flashed the ‘Return to Hub’ message.

While this alarmed many drivers, hub managers are said to have allayed fears of a disruption, claiming that this was a temporary grounding for just two days for a routine audit. 

However, when cabs were not allowed to leave the hub even after two days, many more drivers started panicking, and now, their questions were going unanswered by hub managers. 

“My kids’ annual school fees of INR 10,000 are due. With no earnings, I have no idea how I will pay this,” rued a BluSmart driver who has driven for the company for the past three years. 

This driver, who didn’t want to be named, said the shut down of the service was so sudden that it didn’t allow drivers to make any financial arrangements. 

In his particular case, BluSmart stipulated that it would pay INR 27,000-INR 28,000 per month including fixed and incentive pay. BluSmart’s payout process meant drivers got their earnings every Monday. But it’s been more than two weeks since they received their last payment. While some have migrated to Ola and Uber, the fate of others is in limbo. 

Other drivers banked on this income stability to move from their villages and towns to Delhi, but they are left clueless about the future now. “Earlier this month, I brought my family from Gwalior and rented a place. Now, with no job, I had to vacate the flat and return to Gwalior,” said another driver who had joined BluSmart earlier this year. 

BluSmart Crisis Blows Up

It’s not just the drivers. The crisis has left BluSmart’s 800-odd employees too in the lurch. The company has neither asked them for their resignation, nor handed them the pink slip, but the suspension of operations has led to no work for the staff since end-March. 

BluSmart founder Anmol Singh Jaggi had promised the employees that their salary for March will be credited in April, but it has not been squared yet.

“I know some of the employees were supposed to get married or had scheduled the marriage of their brothers or sisters in the next few months. They are now facing a near-hopeless situation,” said an employee, refusing to be identified. “In fact, potential recruiters are also shying away because of the BluSmart tag on us or offering lesser pay.” 

Crisis broke out at BluSmart in the first week of April when credit rating agencies ICRA and CARE downgraded Gensol to D (default/junk) based on the feedback received from the company’s lenders about perpetual delay in debt servicing.

ICRA also accused Gensol Engineering – floated by Anmol and Puneet Singh Jaggi, the brothers who founded BluSmart – of submitting falsified data and highlighted that BluSmart recently delayed payments for its non-convertible debentures (NCD), which can have an adverse impact on the “financial flexibility and capital-raising ability” of the company. 

Last month, market regulator SEBI in its interim order underlined that the Jaggi brothers used INR 262 Cr of company loans for their personal expenses such as buying an apartment in DLF’s The Camellias, funding foreign trips, and so on.

The regulator subsequently barred the Jaggi brothers from holding the position of director or key managerial personnel in the troubled engineering firm. 

Last month, Inc42 exclusively reported that EverSource Capital has held active discussions to acquire BluSmart for INR 800 Cr. EverSource Capital is a joint venture between the Everstone Group and Lightsource bp. The latter is owned by BP International Ltd, which is also the parent company of bp Ventures, a key investor in BluSmart.

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Edited By Kumar Chatterjee