Reading this article from the CEO of YatraGenie, I cannot say that I am surprised by his analysis. He talks about how the current Taxi Aggregator model in India is bound to collapse since the operators (drivers who are also the taxi owners) are not cared for and not paid on par with the efforts that they put in. There is no doubt that it is a tough life for the taxi drivers. They have to work at least 12 hours in a day and often chose to do a night shift also so their family can lead a life better than their own. They are, in essence, no different from majority of the population in the cities, especially, who sacrifice their own health, time and joys in favor of a hope for a brighter life for their families.
Some basic napkin stuff math tells me that assuming that the car is a Toyota Etios (running on diesel as invariably all taxis do) which probably returns a mileage of approx. 18 km per liter, the running cost per kilometer factoring in the cost of diesel at Rs. 45/- per liter, would be about Rs. 2.50/-. Of course, if the mileage of the car reduces, then the cost per kilometer would rise @ of 50 paise per 3 kms. Add to this maintenance and service expenses of approx. Rs. 5000/- every 3 months (including servicing, denting works, insurance, etc.), that translates to something like Rs. 55/- per day.
Let’s assume that a taxi runs for 200 kms in a single day, on average, for a month. Then the expenses for the operator would be ( Rs. 3/- * 200 + Rs. 55/- =) Rs. 655/- per day or Rs. 20,000/- per month. For every km run, the operator charges the commuter Rs.8/- and that translates to Rs. 48,000/- per month in earnings leaving him/ her with a take home of approx. Rs. 28,000/- per month. Of course, this means that the driver works every single day without a break and doesn’t fall sick at all which is an unrealistic assumption.
Add to the above sum, the stress of dealing with all kinds of customers, the road and traffic conditions in the city which are poor and the picture does become grim. The lifespan of the taxi driver can not be more than 8-10 years. Having traveled in a fair number of taxis over the past 3-4 years in Bengaluru, the age of a majority of these drivers in Ola and Uber would be in the 20s and early to mid 30s. I haven’t seen too many older age drivers and that, I think, is a telling statistic. The likelihood of sustaining a lifestyle involving relentless driving in the city is less. Admittedly, the drivers for Meru cabs are more likely to be older and that is because they have not compromised on the rates being offered for the rides in the city. This in turn benefits the drivers also since they are more likely to be able to balance their life and work while earning enough to sustain their family.
All things said, I agree with Mr. Komitla’s view in the article above about the skewed nature of the current day taxi aggregators such as Ola and Uber. As far as the implosion he talks about is concerned, I am not so sure. The human tendency is to look for get-rich-quick schemes and none are more susceptible to this than the young, ambitions Indian. Once this generation passes on to the 40s and 50s, there will be the next generation, ready to go and pounce on an opportunity that arises then to work hard while young and (hope) to get rich quickly.
Mithun's Musings 