As ride-hailing major Uber readies for its IPO launch this month, its Indian drivers are said to be facing a cash crunch because of a fall in incentives and considerable rise in the work hours.
According to LiveMint report, an Uber driver from Delhi-NCR, Santosh said that the initial adrenaline rush of cab-hailing companies has passed and it has become increasingly tough to manage family expenses with lowered income rate, and growing stress because of the pressure to meet monthly car loan EMIs.
“Driver dissatisfaction has in the past resulted in protests, most recently in India, the United Kingdom, and the United States. Such protests have resulted, and any future protests may result in interruptions to our business,” Uber had said in its IPO filing last month.
“Continued driver dissatisfaction may also result in a decline in our number of platform users, which would reduce our network liquidity, and which in turn may cause a further decline in platform usage,” the company added.
San Francisco-headquartered company is looking to raise between $8 Bn to $10 Bn in its initial public offering (IPO). Uber is reportedly seeking a valuation of $80 Bn – $90 Bn. Interestingly, Uber was last valued at $76 Bn in its $2 Bn funding round.
Uber’s India Market
Uber had entered India in 2013 and has expanded to 40 cities across India with a fleet of 30 Mn cars. The company has claimed to have completed over 1 Bn rides in India and South Asia.
In December 2018, data from an internal company email showed that India accounts for 11% of the total trips received by the platform from across the world. The ride aggregator claims to have completed over 1 Bn rides in India and South Asia.
Uber’s India unit has posted a 30% jump in its FY18 revenue. Uber India Systems posted revenues of $74.8 Mn (INR 533 Cr) for the year ended March 2018 versus $57.5 Mn (INR 410 Cr) in the previous year.
Other Cases Of Driver Protests In India
Recently in March, over 150 drivers of Indian ride-aggregator Ola have protested outside Ola’s Bengaluru office, against the heavy charges levied by Ola as part of their lease agreements, along with other grievances related to Ola’s policies.
Prior to this in early March 2018, drivers of ride-hailing companies, Ola and Uber, had threatened to go on an indefinite strike. Organised by Maharashtra Navnirman Vahatuk Sena, the strike was set to be observed in major metro cities such as New Delhi, Mumbai, Bengaluru, Hyderabad, Pune, etc.
Sanjay Naik of Maharashtra Navnirman Vahatuk Sena had then said, “Ola and Uber had given big assurances to the drivers, but today they are unable to cover their costs. They have invested $7,691 – $10,767 (INR 5-7 Lakh), and were expecting to make $2,307 (INR 1.5 Lakh) a month but are unable to even make half of this owing to the mismanagement by these companies.”
Also in 2017, 3K drivers of cab-hailing companies have protested against the launch of shared rides feature including UberPOOL and Ola share.