Uber & Ola Model in India

First of all, let me preface by saying that I recently researched the Uber and Ola models pretty extensively for a paper I had to write. I am not here to discuss the many legal and ethical challenges these companies face, but simply to draw light on how their operations in India impact drivers and the general population in comparison to more developed countries like the US.

Uber has often cited its driver-friendliness to present its ethics and value as a company. These statements are mainly the result of the fact that Uber drivers are able to earn more money when they need to and have more rides due to the demand on the platform. This is obviously economically beneficial to drivers in countries like the US.

However, that model of economic viability for the drivers does not stand in the case of India. After traveling solely by the likes of Uber for almost 2 weeks in India¬†and having numerous conversations with drivers on the way, I’ve realized that the Uber and Ola model, in fact, gives no personal benefit to the driver at all. The difference stems from the fact that drivers do not own cars in India – they are simply hired by people to drive their vehicles for either personal use or commercial benefit. While the car owners get the advantage of surge pricing, the driver only earns a fixed salary for the month. It also means that car owners make sure their drivers are on the road all day, hence dampening the impact (and sometimes even the need) for surge pricing, due to the fixed work schedule that the drivers maintain.

That being said, the service and the model are obviously fantastic for the customer looking to not waste time waving down a cab in the Delhi summer. Its value for the customer cannot be contested, but the attempt of this post is to discuss the key features of Uber that make it popular in certain circles, and the lack of those very benefits in emerging economies like India.