Sharing is caring. Really?

uber problems in India

An investigation into the experience of Uber drivers in Bengaluru exposes the chinks in the gig/sharing economy armour

India’s silicon valley, Bengaluru, is notorious for its traffic woes. Regular commute for Bengaluru residents is a nightmare thanks to an inadequate public transport system. Jam-packed buses of the Bangalore Metropolitan Transport Corporation (BMTC) and heavily jammed traffic signals are a common phenomenon in the city. Add to this a large chunk of auto drivers who collect fares at their will and you get a complete picture of urban bangalore’s biggest worries — getting from one place to the other.

Five years ago, when Uber entered the scene it was sure to make inroads into this space. Attractive fares and anytime-anywhere availability made Uber a smash hit among the Urban middle class. Taxi drivers found the incentives very attractive. The easy-to-join and easy-to-earn system caught up among the cab drivers and many plunged into the sharing economy at the drop of a hat.

But now, five years past Uber’s entry to Bengaluru, the taxi aggregator faces a bumpy ride even as the platform economy model has grown leaps and bounds.

Striking drivers
Both Uber and its competitor Ola saw a series of driver protests impacting their services across India. The protesters were demanding better income through more driver-friendly incentive patterns. There were also demands of reinstating blacklisted drivers, and review of the mechanism which blacklisting drivers based on user rating. Uber does not consider their drivers as workers and consider them as partners or independent contractors.

Most of the drivers have not taken kindly towards the idea of unionisation and this helps companies like Uber/Ola. However, with income plummeting further there is a rise in the number of drivers taking kindly to the idea of unionisation. Similar to what happened recently in Mumbai, there are reports that Bengaluru is also gearing up for another Uber/Ola drivers strike. In the past the company was able to run the service despite the strikes by using a pool of drivers who did not join the strike. Many drivers abstain from the strike as well since the financial burden on them is huge and they do not want to lose their income for a day.

Most of these drivers work more than 14 hours a day to meet the minimum requirements to earn an incentive. Many of them complain that despite working for nearly 28 days a month, they still can’t meet their expenses which includes monthly installment for their vehicle loans, rentals in Bengaluru and the expenses to send back home. There was a promise of nearly 1.25 Lakhs a month as earnings when Uber established in the city five years ago.

Bengaluru, a dream destination for job seekers, saw a surge in the number of taxi drivers reaching the city in pursuit of this fat purse. There are stories of drivers selling their agricultural land to buy a taxi and heading to Bengaluru hoping they could clear of the loans with few months of hard work. If you pick up a casual conversation with a cab driver during a ride many a times you will find the story of this shattered dream. Some of them stay on just because they have nothing else to do.

Legal experts say that these cab companies cannot deny their drivers legally. According to experts, these drivers can be considered workers as per the definition of Industrial Disputes act given the amount of control exercised by these cab companies on the drivers. This is contrary to the claim that App providers act as a facilitator and hence does not hold any responsibility for what happens in terms of the income. Driver ratings decide which driver gets the ride if there are multiple options available to the user and is purely controlled by App’s algorithm. The driver does not have an option to choose the ride or decide the fare.

There is some interesting research on how the algorithm acts like a micromanager who forces the driver to do more every time he wants to take a break or relax. There is a definite amount of surveillance done by the app which influences the driver behaviour. Alex Rosenblatt, a researcher in algorithmic labour, points to the inherent information asymmetry which helps the app control this diverse workforce. Her research throws some interesting insight into how the app controls the labour and how the algorithm contradicts the claims of freedom, flexibility and entrepreneurship.

User gratification
Given the nature of public transport in Bengaluru, the customers would still want more of Uber. Metro hasn’t really catered to the IT corridors which experience huge traffic jams on working days forcing many a commuter to rely on Uber or Ola. However, many of the customers experience security concerns and complain that the quality of service has come down drastically. Lack of availability of cabs is common especially during peak hours. Drivers call up the customer, get to know the route and then cancel the ride if there is traffic jam in that area.

It is interesting to note that while drivers protest the addition of additional cabs, customers complain the lack of availability during peak hours. Customers are also unhappy about the pricing since the pricing skyrockets when it rains or if there is huge demand. Drivers, since they have a required number of rides to finish in a day, prefer rides which are towards an area where there is less traffic. There are times when the driver comes in, cancels the ride and then rides it as a personal ride to avoid deductions from Uber/Ola.

This puts the customers under confusion and sometimes they reject the rides considering safety. The Apps have responded to the safety concerns by adding specific safety kits. But customers complain that sometimes they end up riding with drivers who are not the ones reported by App. Customers also complain that driver behaviour is pretty bad at times and hope the new safety features in the app would be a step in the right direction.

Government controls
Uber and Ola in Karnataka are governed by the On Demand Aggregator Taxi rules which was instituted by the state in 2016. These rules were intended to curb the surge pricing and address the customer safety concerns. Uber and Ola went ahead and challenged the constitutional validity of these rules in Karnataka High Court but the court verdict was not in favour of them.

These cab companies then adhered to the regulations suggested by the Government. However, these rules do not provide an efficient mechanism to find and penalise the defaulters. Normal traffic inspection may not be sufficient to ensure that the cabs are run according to the rules.

Motor Vehicles Act 1984 is pending in the Rajya Sabha and with the passing of the act we will have a nationwide policy for online cab aggregators. But does it address all the concerns of the drivers and passengers? Indicators are that it won’t. Experts argue that understanding the economics behind the aggregator model is key to any policy formulation that happens in this area.

If we take the example of Uber and Ola it disrupts the public transport system as well as the labour landscape. Sharing economy has a lot of positives which we would want to embrace. But we should always be aware of the information asymmetry that is present — be it Uber, Airbnb or any such platform, warns researchers such as Alex Rosenblatt. Can the solutions of sharing economy provide an answer to Bengaluru’s traffic woes and provide thousands of jobs in the process? Only time will tell.

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