A tech-start up for the benefit of users worldwide such as Uber, literally meant upstart, to deliver a sharing economy that had left a profoundly disruptive impact on the existing business model is in the news once again. The ongoing strike by thousands of Uber and Ola drivers in Delhi and Haryana demanding better pay had dislocated the ride-hailing services that had all but decimated traditional taxi and auto rickshaw operators with their relatively inexpensive fares for far too long.
Ola and Uber taxi drivers contend their earnings had come down steeply to Rs 20,000 per month from Rs 1 lakh earlier after withdrawal of driver incentives by the tech upstart companies. Though both these ride-sharing companies use app-based tools for hiring by customers, they have commonly followed an incentive-based payment structure which incorporates payment of a bonus on scoring daily targets with the target and bonus changing every day to foster more competition among drivers. The spinoff of this system includes non-stop working hours with a little break in between rides so as to cash in on the opportunities offered by the clientele in the metro cities who seek cheaper modes of transport.
Before the latest strike in Delhi, taxi aggregators Uber and Ola got a reprieve from the Karnataka government on February 3 after the State Transport Department postponed its earlier decision to crack-down on the cab-sharing practice. Even this cab-sharing in a crystalline way underscores the relevance of contemporary technology in easing mounting pressures on the congested urban transport system. Paradoxically, while the Centre is promoting a ceaseless campaign for digital governance with every State vying with one another to outsmart others, the same authorities are finding it intractable to come to terms with the disruptive effects of contemporary technology on conventional models of business. Presumably, this is because both the stakeholders (monopoly public transport service providers) as also the revenue authorities in the existing business model had gotten used to their mutually beneficial relationships for so long that they are unwilling to risk losing a share of the pie if this is destroyed.
Ride-hailing firms such as Uber providing a host of services including a product that facilitates driver partners to pick up and drop identified riders through the Uber app under a single contract is now encountering the ire of the authority. This is odd, considering that when a customer gratuitously opts for such a pool services through the Uber app, he/she is content with another person sharing the journey. But for the state transport officials, this is abhorrent as they found no legal framework for ride-sharing services and as such it is 'illegal' for cab aggregators to do so. These services transgress the conditions of the carriage permit. It is altogether another odious saga that the same functionaries show scant regard to such provisions for pecuniary motives when it comes to the issue of overloading of trucks and heavy duty vehicles that risk accidents, both on the roads and also to the long-term safety of the national highways constructed on public money.
It is germane to recall a momentous report released by the Germany-based Ellen MacArthur Foundation with knowledge partnership from the UN Conference on Trade & Development (UNCTAD) recently. It argued that in emerging economies like India, providing access to a host of different vehicles through sharing schemes, combined with an attractive public transport system, ideally responds to an efficient public transport network. Over and above this, it accords a transport solution that can be more appealing and pragmatic than car ownership. India's path of de-carbonised economic development would be well-served if reduced emission results by such sharing process willingly by people who get a ride for reduced rate by doing so.
This well-researched report cited Ola that provides a mobile app to book taxis and auto rickshaws, besides extending the concept to ride-sharing. Ola Share allows passengers to share a ride and its cost with passengers heading in the same directions. It also noted that car-sharing schemes are gaining traction in India with companies like Zoomcar and Myles offering self-drive car rental services by the hour. This way there is not only the customer obtaining reduced cost in the travel with ease but also the companies maximising value capture. This way the symbiotic relationship leads to an unobtrusive upshot on the ambience for a sustainable ecosystem. In fact, the German research report bears out the fact as to how new technologies could be harnessed to foster traffic engineering that is self-regulating and preclude the pitfalls of a centralised, top-down approach. It is pertinent in the context of dealing with a continental size of countries like ours.
No one can be impervious to the obvious fact that these firms launched by enterprising people leveraging a new business paradigm to provide a solution to the daily problems of customers seeking to travel in a taxi even with strangers work outside laws and regulations. But where issues pertain to minimum wages, health and safety of the drivers and tax collections, the authorities can intervene in a way that does not destroy the animal spirit of innovative business models that shaped the digital economy abroad with which our politicians had fallen head over heels to implant here!
In fact, the advent and advance of the gig economy meant that many more workers are deemed self-employed contractors for large enterprises or cab aggregators such as Uber or Ola sans all the attendant legal and financial burdens, cost and complications of hiring staff. If India's marked superiority in software and business process outsourcing (BPO) and back-office proliferation for rich companies abroad are permissible, there is no point in quibbling over the niceties of workers' welfare as such Union-centric approach was given a go-by when India came to terms with market economy in the last century, policy observers wryly say. Globalisation was blamed for the existing inequalities among those filthily rich and those marginalised from the mainstream, but the new way of business models by modern technology is sure to crack open the divide further if corrective steps are not put in place by individual nations or collectively globally.
(The views expressed are strictly personal.)