Amidst fall in driver incentives, Ola and Uber increase average fare by 15% in 2018

After offering subsidised rides for several years, app-based cab-hailing major Ola and Uber  have been increasing the fare consistently for past 12-18 months.

According to research & advisory firm RedSeer, the average cost per ride on these app-based taxi-hailing service has increased by 15 per cent to Rs 220 in 2018 from Rs 190 in 2017. In the previous year, customers witnessed an increase of 10 per cent in the average fare.

The figures shared with TOI are a national average, and the actual changes may be different for different cities.

For the past several months, peoples living in metros have been complaining about increasing in fare. Similar reports surfaced in July when riders claim that the prices charged by both companies have risen by more than 30 per cent.

In certain cases, riders even noticed that their daily rides have become costlier by 50 per cent to 100 per cent during the period.

Importantly, the price rise was observed in regular pricing without surge charge.

Besides, the lucrative incentives for driver partners went down by over 30 per cent in the last one year. The steep fall in incentive is the actual bone of contention for which drivers partners of Ola and Uber are on a strike in major cities of India.

On an average, the income of drivers (including incentives but excluding EMI payments for their vehicles) used to be above Rs 30,000 in the second quarter of 2016. However, it is only around Rs 20,000 per month now.

Similarly, drivers incentives used to be at 60 per cent of booking value in 2016 and now it hovers around 14-15 per cent only, outlined the report.

The continuous rise in fuel price is one of the reasons behind low income and incentives.

Despite heavy capital infusion and expansion, the growth chart of Ola and Uber also went flat in 2018. According to recent data by industry experts, the growth for Ola and Uber declined to 20 per cent on average in 2018 to 3.5 million across all segments, including taxis, autorickshaws, and shared cabs.