Hailing the cabbie with hefty bonuses, big cash incentives

Not long ago, taxi drivers were poorly paid and their cabs poorly maintained.

But with online cab aggregators swamping the market, cabbies’ fortunes have changed overnight.

They are being wooed with huge cash incentives, hefty bonuses and are being given incentives to buy new cars.

At the same time, online cab companies, which are mopping up hundreds of millions of dollars from investors, are just not able to keep up with the rush for their services.

One cab aggregator, for example, offers drivers incentives of ₹85,000 in cash to cross over from competitors, while another part-funds vehicle purchase, mostly of the Toyota Etios sedan.

The drivers also receive ₹300 more for every sixth ride but this is where the business model seems to be failing the cab companies. “We get so many requests asking us to pick up customers at far off places within minutes of logging in that it is nearly impossible to fulfil the demand,” said driver Thimmappa (name changed).

Here is where technology has let these cab aggregators down badly. The software they use should be able to direct the driver close to the customer’s location but that doesn’t always happen.

The problem lies in the affiliate business model adopted by online car aggregators, said Gaurav Aggarwal, CEO of Savaari.com.

“The drivers have to ensure that they make enough money to pay for the diesel, EMI and for their livelihood, so they can refuse to do trips that don’t cover all these expenses. Moreover, many drivers want cash payments and do not opt for credit, which has to be claimed a day later.”

Obviously, cash incentives offered by the cab aggregators are still not enough to cover up costs incurred by the drivers.

Savaari partners with 10,000 drivers and offers them a minimum guaranteed amount every month, which helps to avoid no-shows and refusals, he said.

Ashish Kumar, Director of Bookcab.in, moved out of city cab services as he found he could not compete against the deep discounts offered by other well-funded online cab aggregators.

“Most cab aggregators cannot guarantee a positive customer experience because they cannot match the demand for cabs during peak hours. Drivers are paid just ₹150 for the first 10 km and most are cruising around during non-peak hours.”

He claims that to attract more drivers, they must be paid at least ₹100 more for the first 10 km.

To make sure that demand during peak hours matches supply over the next 3-6 months, Taxi For Sure has tied-up with major auto manufacturers, getting them to sell their cars at discounted rates to drivers.

It also offers cars as an investment option to people on their network, where Taxi For Sure provides a driver etc, said Aprameya Radhakrishna, co-founder Taxi For Sure.