How taxi drivers are taking the road to entrepreneurship
The online taxi service revolution, courtesy Ola, Uber and Meru, has proved to be a boon not just for drivers but also for those seeking additional income
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Mumbai: Abhishek Sahijpal works as a systems administrator at the Mumbai office of a French multinational. His late father used to work with the Indian Railways in Mumbai where Sahijpal grew up. He has a post-graduate degree from Chennai’s Annamalai University. He has a three-year-old daughter and a cookie-cutter middle-class life.
Yet, Sahijpal moonlights as a taxi driver for Ola and Uber, shattering the stereotype of what a cab driver in the city should be like. But that’s not the only convention he is breaking: He converses with customers in English, enjoys driving on these “hellish” roads and sees his new occupation as a positive.
“Looking at the times we live in and other countries,” he says over the phone, “I thought: I am well educated, I can see a growing trend which interests me and I can drive. So, I started doing it. Today, when you go abroad, driving a cab is the most basic of jobs. So, I said, let’s try it in Mumbai and see how it works out.”
Importantly, Sahijpal is his own master—at least before noon every day when he chooses to operate his taxi—as he owns the car he drives, bought specifically for the purpose of operating it as a cab since February. It’s given him extra income to cover the EMI costs and petty household expenses, and given him a heightened sense of independence.
“I operate the cab when I feel like, whenever I have extra time,” he says.
Sahijpal is one among several thousand in the industry who have discovered an entrepreneurial spirit on the back of a burgeoning taxi business. Many have bought cars so they can operate as cabs, bought multiple cars and hired drivers so they can increase revenue and pushed their own limitations in dealing with paperwork, investing in customer services and learning new technology. The social biases are blurring as white-collared workers too are looking at the driving-taxi business with a different mindset.
Ola and Uber hold a majority of the market share since their launches 3-5 years ago—Ola insists it is more than half while Uber claims to be on par. There is no independent agency that tracks these numbers, but both are battling for a share of India’s cab business that may be worth $7 billion by 2020, Mint had reported. While Ola operates about 450,000 cars in over a 100 cities, Uber has 400,000 driver-partners in 28, handling 5.5 million rides per week, and both are expanding fast.
“Long term, we believe this industry would need a million drivers. The gap is still big,” says Siddhartha Pahwa, CEO, Meru, one of India’s first such cab services.
Sound business plan
Other taxi services, like Taxi for Sure (which Ola acquired and then shut down), Easy Cabs, Priyadarshini, Mega Cabs, Tab Cab, among others, have either fallen by the wayside or struggling to compete.
Though still resisted by local cab operators—like black-and-yellow taxis in Mumbai, for example—drivers (or driver-partners as Uber calls them) and owners who spoke to Mint for this article, maintained that these services had made earnings and lifestyle better.
Pradeep Kumar Verma, 36, lives in Mumbai with a family of six—elder brother, his wife, two younger brothers and older brother’s daughter. His wife, two children and parents live in Binepur, a village near Varanasi in Uttar Pradesh.
Verma has been here for about 20 years, having started as an auto-rickshaw driver, earning Rs300-400 per day, before switching four years ago to become a private taxi driver, earning Rs16,000 per month.
About six months ago, he quit his job to join Ola. He had heard about the service provider through his network of family and friends—“it’s a good place to work and the potential to earn is high”, is his explanation.
He does not have a car of his own and works from 7 in the morning till 6pm, earning on an average Rs800 per day. He does not yet want to buy a car of his own because he is unsure whether the car service provider, as an industry, will exist a few years down the line. “There used to be Tab Cab, Easy Cab… None of them have survived,” he says.
All the same, he quickly adds that this service, unlike the others, is better, as customers like it and the drivers find it hassle-free. “I will drive this car for another three months and then make up my mind about whether to invest in a car of my own,” he says.
For drivers, convenience (not to mention travelling in air-conditioned cars for most part), earnings and freedom are obvious benefits.
Uber started a service wherein the driver, on his last trip of the day, would get a customer travelling in the same direction as the driver’s final destination.
A number of Uber’s drivers also own their cars, according to a company spokesperson; more than 75% of Meru’s drivers are also owners and about 20-25% of these people also have more than one car—so they are able to employ someone to drive, according to Pahwa.
Shailesh Sawlani, the general manager of Uber in Mumbai, says he categorizes their driver-partners as entrepreneurs because they make an investment in their business (a loan for a car, for example), manage all their processes and are self-sustaining. They make their own schedules, work when they want to and can vary their revenue based on how many hours/trips they do.
Vijay Kumar Pandey is one of the early adopters, joining Meru about nine years ago. Loyalty pays well—he now owns two cars and has employed a driver of his own for the second vehicle.
Pandey used to be a personal driver and was struggling under personal loans when he heard of Meru. He started with a five-day training programme, improved as a driver and learnt to talk to customers. He got the car from Meru and then under their “chalak se malak” (driver-owner) scheme, bought one of his own, a Mahindra Logan. Then came the profit and “life changed”.
Soon, he got another car, a Maruti Ertiga. So, he got a driver for the Logan. Now, Pandey wants to add a Swift Dzire to his growing fleet. He gets about Rs2,500-3,000 in a 12-hour shift. His loans are paid out and he has managed to buy a house in Nalasopara. His son will graduate soon and is unlikely to follow on his father’s footsteps.
It’s not just existing cab drivers or those looking for a better life within the profession who are switching gears. Among those attracted are also conventional tour operators—perhaps a natural progression—and complete novices.
Ramgopal Chaturbhuj Choudhary, Shernaz Anklesaria and Ankit Mehta, at first appearance, have little in common. Choudhary, till last year, managed the family transport business in Nashik. Anklesari is an insurance agent in Mumbai, while Mehta owns Star Power India, a solar panel supplying company.
Today, they all own a fleet of cars which operate as Ubers—Choudhary has 24 cars, Ankelsaria has five. Mehta has 27, which work with both Uber and Ola.
For Choudhary, it was a logical expansion, though this arm of the family business has now moved to Mumbai. For Anklesaria, it made business sense. Mehta had a childhood dream of being in the transport business and loves technology.
“I normally travel by taxis. When Uber and Ola came into the market, I started talking to the drivers and figuring out how it works. With blessings of my guruji, I decided to do this,” says Anklesaria, who has seven drivers, with two cars on double shifts, since August 2015.
Anklesaria believes this is her “pension income”—she will do it as long as the services exist. She works only with Uber, her fidelity stemming from the loyalty she gets from her primary business of insurance—her customers, mostly Parsi.
Choudhary had to go beyond the family driven network of luxury buses, move to Mumbai as his fleet has increased to 24 in just about two years. He finds a synergy in philosophy with Uber—the reason he says he works with them.
He says his revenue has gone up from Rs6 lakh with one car between September 2014 and March 2015 to Rs80 lakh in the last financial year.
It’s easy to understand why all three are already on their way to acquiring more cars—Mehta aims to hit a 100 cars after starting in this business last October.
While all the owners vouch for their drivers’ happiness, Sahijpal remains an example of how to fight social biases.
“My mother was upset that I went into this, from a perspective of the society—what will people say, that kind of thing,” he says. “Even in the community I live in, when people see a yellow plate (car registration number), they wonder. I am quite young; my friends, everyone asks ‘why are you doing this…
“They ask if I have lost my job,” Sahijpal says laughing. “I tell them I am doing this out of interest.”
Sapna Agarwal contributed to this story.