Uber to continue pool services, claims they’re legal — transport commissioner says otherwise

If MK Aiyappa, Transport Commissioner, Karnataka, has his way, uberPOOL and Ola Share will have to stop their services by this Friday. The cab aggregators, however, are in no mood to give up. Uber, in a press conference in Bengaluru, stated that their share services aren’t illegal and that they will be talking to the transport department.

Aiyappa stated that if the cab aggregators do not comply, action will be taken and cabs will be seized. “In the meeting between the cab aggregators, driver partners, and the department, Ola and Uber agreed that they were illegal, and will stop the pool and share services," he said.

The Uber team intends to have a discussion with the transport department and work out a viable plan. As per state transport department guidelines, services like Ola and Uber fall under contract carriage permits and as such the cab aggregators cannot pick and drop passengers during the course of the ride as it is only for point-to-point pickup and drops. Stage carriage permits, which allow pickups and drop-offs along a particular route, can only be accorded to Bangalore Metropolitan Transport Corp and school and college buses.

Christian Freese, General Manager, Uber, Bengaluru, Mysuru, and Mangaluru, however, stated in the press conference that the driver can stop and pick up as many passengers as per the contract. The contract, he said, would be among all the riders and the drivers.

Uber also stated that it is starting a public petition for the riders to vote for the continuity of uberPOOL in Bengaluru. It is one of the first public petitions the San Francisco giant has taken in any country. Uber intends to take the petition to the transport department.

The uberPOOL and Ola Share debacle started when the driver partners weren't happy with the drop in incentives and, in their complaint to the transport commissioner, stated that pool services further reduce their incentives.

“We are not looking to replicate the public transport system. We believe that the ridesharing products like uberPOOL are the future of urban mobility, helping decongest cities by getting more people into fewer cars and letting riders move around their city more affordably,” says Christian.

Bengaluru is the fifth largest uberPOOL market globally and last year accounted for over one million rides. This year, however, hasn't started off on a great note for this Unicorn as well as for competitor Ola. Apart from the issue with the transport department, there was a drivers' strike after the cab aggregators resorted to a significant cut in incentives to drivers as part of cost-control measures.

An Ola driver said that earlier, incentives allowed a driver to earn a minimum of Rs 10,000 a day, based on the number of rides. In fact, when Ola started, the drivers were earning several lakh a month.

According to the drivers, instead of the earlier requirement of a minimum 12 hours of service, they are now being asked to put in a minimum of 18 hours to get any form of incentive. Currently, Ola pays its drivers Rs 2,200 for nine rides in a day and Rs 5,800 for 17 rides a day. Uber, on the other hand, pays Rs 1,000 for rides worth Rs 600, Rs 1,400 for rides worth Rs 800 per day, Rs 5,800 for rides worth Rs 2,700 per day and Rs 7,000 for rides worth Rs 3,300 per day.

Ola reportedly has over 20,000 cars registered on its platform and Uber 33,000. With Ola Share and uberPOOL, the amount of money the cab drivers make is higher.

“I personally prefer a share ride; the amount is more and the number of rides also is higher,” says a cab driver associated with both the Ola and Uber platform. There also is the issue of increased congestion on the streets. Bengaluru is infamous for its traffic jams and doesn’t have a great public transport system in place. Although the metro construction has been going on for years, only one line is operational yet.

This isn’t the first time the government has cracked down on the cab aggregators  — early last year, Ola and Uber had started their bike taxi services in Bengaluru, which were again deemed illegal by the government. The shuttle bus aggregator — ZipGo — faced similar run-ins with the government and had to shut down in 2015.