Radio taxis vs App-based taxis

Credits: Scroll

Krati Purwar & Megha Mallick

Till a few years ago, taxi drivers in Mumbai used to ask for fare hikes during a certain time of the year. Now, they don’t. They are afraid that they might lose customers to application based cab services like Ola and Uber, which are often cheap. There are some regulations on the services of the app cabs, and unless there is, the business of the taxis will dwindle.

According to a Hindustan Times report , before April 2014, Mumbai had 13,752 radio taxis and 43,976 conventional ones. However, in January 2017 the number of tourist taxis running in the city was 55,760 against 55,256 number of black-yellow taxis.

After repeated requests from taxi unions, in July this year, taxi fares were expected to increase. Their business has already nosedived, and the drivers expect it to get worse. 

App-based companies making profits

They, all of a sudden, increase their rates when the customer needs to travel a long distance but there are lesser cabs around. For the app cabs, whatever the customer pays, a small part of it goes to the company whereas the leftover is taken by the driver.

While most taxi drivers in Mumbai earn around Rs 8000 a month, the app cab drivers earn at least Rs 25000. “One reason for this could be that app-based cab drivers have captured the market for long-distance trips, and taxi or auto drivers are playing shorter distances than they used to,” said Dhawal Ashar, a senior project associate for urban transport at WRI India Sustainable Cities, a non-profit organisation advocating for sustainable urban transport.

As per a report of scroll, in 2016, almost 15000 yellow top taxis were on a strike in Delhi, and claimed that Ola and Uber were endangering their livelihood. Within three days, the strike was called off, with the Delhi government promising to address their issues. Also in Kolkata, in 2017, according to data released by the State Transport Department, the number of registered app cabs were more than the taxis, which in the city are known for their constant refusals and bad behaviour.

The taxi unions in Kolkata agree that customers now prefer app cabs more. They claim that only two-thirds of the registered taxis hit the roads. Transport economist Adrish Thakur says that app cabs have won the loyalty of people for prompt services, security features like shared rides. 

Bimal Guha, general secretary of the Bengal Taxi Association, said that almost daily, the association is losing members. People are exiting the trade because running a taxi has become unviable.  

How app-based taxis took over conventional taxis

The multi-million dollar business of booking online taxis too over Indian markets by offering ease of booking not only to commuters but by luring the drivers. Both Ola and Uber provide discounts and festive offers which has helped them build their clientele.

Moreover, these app-based taxis came with door-to-door service that was not possible with the public transport systems and taxis too.

The smart taxis made drivers entrepreneurs. They can take bookings as per their convenience and were given incentives too. The best deal for the drivers was the reduction in non-paid distance. Using the GPS facility, the drivers in the vicinity of the commuters accept the service, thus, reducing non-paid distance to a significant amount.

Uber is operating in many countries with UberX service. But only in India, it has a cheaper version called UberGo to cater every scale of customers.

To expand their business, companies like Ola and Uber have involved services of Auto and Bike. Thus, broadening the verticals of their services.

Taxi owners fighting against app-based taxis

In order to overcome the challenges and make their way, Bengal Taxi Association in Kolkata created an application so that customers can hail the yellow-black taxi and ride through the city.

Even Mumbai had seen two taxi associations coming together to form an application called 9211 app. The application helps the commuters to book the conventional taxis using their smartphones.

Apna Cabs in Mumbai aggregated the yellow-black taxis and offers railway station and airport pickups.    

In Delhi, the government introduced an application called Poocho for commuters to get instant taxi and auto service using their phones. 

However, while all of these are still fighting, Auto application Jugnoo appears to have gain some success in surpassing Ola. It is available in Ahmedabad and Indore along with other 23 cities in the country and claims to be 45 percent cheaper than Ola.

With luring offers for drivers and easy service to commuters, the radio taxis still have a long fight to go. While Ola and Uber are constantly haggling with million dollar companies to cater their audience with innovative ideas.