Abstract
This article examines the role of the sharing economy in India’s development through the examples of aggregated taxis such as Uber and Ola in Delhi. 1 Based on a general survey of Uber and Ola drivers and users in Delhi, we argue that Uber and Ola do not measure up to their expected potential in the development of India’s economy on the parameters of ecological sustainability, employment through renting out assets and reduction in the need to own assets. Yet, Uber and Ola are notable for the creation of viable employment opportunities for drivers, and their many benefits for urban middle class users. Unique to the Uber and Ola phenomenon in India is the interception of driver opportunities by taxidars (taxi-owners). This tweaked Uber model for the Indian market allows the middle class individual—the police official, bureaucrat, property dealer, transporter or a professional—an entry into the aggregated taxi market.
A review of media reports and academic and policy literature reveals that opinions about the sharing economy range from optimistic (Koetsier, 2015; Lansley, 2016; Orsi et al., 2013) to cautionary (Nadeem, 2015) in turn to critical (Malhotra & Van Alstyne, 2014; Schor, 2015; Walker, 2015). But even the most critical works emphasize the transformative potential of the sharing economy to create an egalitarian participatory economy (Richardson, 2015; Rifkin, 2014).
In India, the concept of the sharing economy is still in its nascent stage (Gururaj, 2015). The buoyant prognosis of India’s sharing economy is based on projections of the combined market potential of a high incidence of internet connectivity and mobile phone usage, and a relatively young population (Chandrasekhar, Ghosh, & Roychoudhary, 2006, p. 5055). 2 The traditional Indian cultural ethos of sharing is viewed as a congenial context for the growth of the emerging sharing platforms that will address the persisting problem of inadequate infrastructure in the country (Doley, 2015). The sharing economy is seen as contributing to India’s development through the creation of a range of economic activities that will transform the “future of work, production, and collaboration.” It is regarded as “a paradigm shift in the employment market” that encourages “micro-entrepreneurship” leading to “gainful employment” (Gururaj, 2015). Rapid growth of the sharing economy in India is evident in start-ups in the sectors of accommodation, healthcare, household, food, and grocery (Biswas & Pahwa, 2015), but it is most encouraging and impactful in the adoption of sharing platforms driven by aggregators in personal transportation industries—facilitating greater convenience for individual commuters (Biswas & Pahwa, 2015; Gururaj, 2015). The best-known cases are the taxi aggregators Ola and Uber.
Uber and Ola—the “poster child(ren)” of the sharing economy (Gagnon, Carter, & Thornton, 2016)—have raised exactly these types of debates in key metropolitan cities in India including Delhi, Mumbai, Bengaluru, and Kolkata. So significant a phenomenon have Uber and Ola become that they have rendered the Indian Motor Vehicles Act outdated prompting the Ministry of Road, Transport and Highways to work toward new legislation (The Economic Times, 2016). The Delhi High Court, even as it praised aggregated taxis for easing the pressure on public transport, directed these cabs to stop surge pricing (Garg, 2016). Indeed, India is Uber’s “largest geographic market outside the US” (Das, 2015). Although Uber and Ola are subjects of media reports and articles, there is no official or academic study that examines Uber’s and Ola’s role in India’s development.
This article examines the role of the sharing economy in India’s development through the examples of aggregated taxis such as Uber and Ola in Delhi. Our analysis, which is based on a general survey of Uber and Ola drivers and users in Delhi, shows that Uber and Ola do not measure up to their expected potential in the development of India’s economy on the parameters of ecological sustainability, employment through renting out assets and reduction in the need to own assets. Yet, Uber and Ola are notable for the creation of viable employment opportunities for drivers, and their many benefits for users. Unique to the Uber and Ola phenomenon in India is the interception of driver opportunities by taxidars. A taxidar is a well-heeled bureaucrat, businessperson, police official, real estate agent, or a professional who attaches a car he owns with Uber and Ola and, instead of driving it himself, employs a driver on a fixed salary.
Our analysis is divided into five sections. In the first, we describe our research field through a historical mapping of Delhi’s transport sector. The second section describes the questionnaires, interviews, observations, and media reports that were used for data collection. We have used the examples of Uber (an American startup) and Ola (an Indian startup) as they dominate the aggregated taxi market in Delhi. The choice of Delhi, the national capital of India, as a field was made because of the city’s insatiable transport demand. In the third section, we outline key features of Uber and Ola companies as taxi aggregators and also use the data to profile drivers and users. The fourth section uses the profiles to outline the appeal and benefits of Uber and Ola for users and drivers. The concluding section is a critical examination of whether Uber and Ola live up to the promises of the sharing economy: employment generation, ecological sustainability and leverage of existing assets.
Historical Context of the Transport Sector in Delhi
Delhi’s population has grown exponentially since independence, not the least because as a capital city it draws migrants from all over the country. It is in recognition of this reality that in 1985, the Government of India constituted the Delhi-National Capital Region (NCR) to facilitate planned development. 3 Delhi’s roads have to bear the burden and accommodate transport from the neighboring satellite cities of Noida, Gurugram, Ghaziabad, and Faridabad. There is a significant movement of a substantial number of residents across these cities for the purposes of education (university and schools—kindergarten, primary and high), work (white and blue collar), shopping, healthcare (hospitals and clinics), leisure (restaurants, bars, theatre, and parks), and travel (international and domestic airports and railway stations are located in Delhi). Residents move across these cities seamlessly in their everyday lives except for the frequent traffic snarls. The extension of the Delhi Metro train network to Noida, Gurugram, Ghaziabad, and Faridabad is an acknowledgment of the increasing commuter-needs of the cities’ residents. The transportation planning issues faced by the region include poorly constructed roads, poor drainage leading to flooding, inadequate public transport, traffic jams, air pollution, and growing user demand.
The growth, dynamism, and diversification of the transport sector in Delhi reflects the increasing needs of a rapidly growing population. It also draws attention to the inadequacies of the Delhi transport authorities to respond to the same. The Delhi Transport Corporation (DTC) bus service was the main means of public transport for Delhiites until the introduction of the metro trains in 2002. Auto-rickshaws—85,000 in number—have since the 1950s been a popular choice for those wanting to escape the long wait for the often-overcrowded DTC buses. Offering cheaper fares compared to black-yellow taxis (traditional taxis), allowed the auto-rickshaws to capture the “leftover” commuters of DTC. Cycle rickshaws and tongas (horse-drawn carriages) (Sethi, 2010) were restricted to certain parts of Delhi and were used for short distances. Though the frequent customers for the taxis were the rich, the middle-class members would use them on special occasions such as an evening out, wedding, and ride to the railway station. In pre-liberalized India, owning a private car was a luxury afforded only by the well-off. Two-wheelers (motorcycles and scooters) and bicycles were the private means of transport for the middle-class and lower-class groups, respectively. Most high-level functionaries in the government chose not to buy cars as they had access to official vehicles that were often (mis)used for private errands.
Post 1990s with the introduction of credit cards and the availability of car loans in India’s liberalized economy, the numbers of individual car ownership rose across the country. 4 While contributing to the crowding of Delhi roads, these new cars did not reduce the passenger burden of the DTC buses. In 1992, the Delhi Government supplemented the DTC buses with private ones to ply the DTC routes (Mathur, 2012). 5 In addition, there were also private chartered buses—plying popular routes for university students and the middle-level professionals—which charged a relatively higher fare but assured a more efficient and express service with fewer stops. The introduction of metro trains in 2002 ushered in a new phase in rapid mass transport as it carries 260,000 passengers daily (Haider, 2015). The Delhi Metro Rail Corporation’s (DMRC) claim that the train has reduced 390,000 vehicles 6 from the city is of little value as about 1400 new cars are added to Delhi roads daily (Angre, 2014). The average 45.8 percent decadal growth in Delhi’s population (The Indian Express, 2015) creates an insatiable demand for transport that the DMRC cannot on its own meet. In the latter half of the decade of 2000s, the taxi segment saw new entrants—radio cabs such as Meru Cabs and Easy Cabs 7 —that could be hired through telephone booking (Pathania, 2012). The clientele of these cabs with white-uniformed drivers came initially from the corporate sector and were used mainly for rides to the airport or business meetings. In addition to the comfort of air conditioning and clean interiors (compared to the dilapidated black and yellow taxis), these taxis spared the busy executive the hassle of scouting for a parking spot. Subsequently, the use of these taxis spread to other customer segments—students and middle-level income groups—mainly for airport rides. The next significant entrants into this taxi market are Uber and Ola.
Research Design
The stakeholders in Uber and Ola are their employees (including drivers and corporate personnel), investors, users, traditional taxi drivers and owners, auto-rickshaw drivers and the state. The state is an important actor in this field by virtue of its regulatory role, particularly in the light of recent controversies—rape of a woman passenger by an Uber driver (Goitom, 2016) and surge pricing (Hindustan Times, 2016). Both users and competitors of Uber and Ola are keen that the operations of these taxi aggregators be monitored and regulated by the state. While a discussion on this significant issue is beyond the scope of our article, we must note that the existing national legal framework The Motor Vehicle Act, 1988 is inadequate since both Uber and Ola companies claim that they are not taxi companies but only providers of a technological platform to connect the driver and the user. Thus, not only is this an evolving field of legislation, but it is further complicated by the fact that matters of road transport are a state and not central subject, 8 and each state is gradually legislating its own rules to deal with the phenomenon of this new taxi (Goitom, 2016).
Our research employed surveys, unstructured interviews, and observations for data collection (mid-June–September 2016). Media reports and websites of the relevant state departments and Uber and Ola Companies were also sourced for information. Interviewees were assured of the anonymity of their answers. Questionnaires (Appendices 1 and 2) were administered to 45 Uber and Ola male 9 drivers (Delhi) and 60 users of Uber and Ola (Delhi). Thirty Uber and Ola drivers were accessed using the company app to hire cabs. In addition, 15 drivers whose cabs were parked outside residential colonies, shopping malls, and metro stations were interviewed.
Snowball technique was used to identify users for interviews. Forty users responded to the questionnaires via emails, twenty users answered questions in person. Some of the in-person interviews led to longer conversations. Some interviews became a narrative account of the respondents’ experience as a driver 10 or user.
We also conducted brief unstructured interviews with 20 auto-rickshaw drivers in North and South Delhi and three proprietors of black and yellow (traditional) taxis stations located in South Delhi, Central Delhi, and East Delhi and 18 black and yellow taxi drivers. By virtue of the adverse impact of Uber and Ola on their respective businesses, auto-rickshaw and black and yellow taxi drivers become stakeholders in the Uber and Ola regime, and also some of the current Uber or Ola drivers are from the former two enterprises. The aim of these interviews was to confirm the validity of media reports about the opposition of these drivers to Uber and Ola. These interviews were placed around the question: how did old enterprises like the 85,000-strong auto-rickshaw enterprise and the 15,000-strong traditional black and yellow taxis come to be threatened by Uber and Ola?
We could not access or interview officials in the Delhi Government’s Transport Department or the personnel at the corporate offices of Uber and Ola companies and the state. We relied on newspaper reports, government department websites, and company websites to source this information. The shortfall in regard to Uber and Ola personnel was also to an extent overcome as drivers and some users spoke about their experiences with them. We used this data to profile the Uber and Ola companies, drivers, and users.
Profile
Taxi Aggregators—Uber and Ola
Uber and Ola are examples of taxi aggregators. “Taxi aggregators typically don’t own any cabs or employ drivers; they connect customers with drivers through a tech platform, the front-end for the customer being an app” (Das, 2015). Even though companies managing these services call themselves technology companies (Venkatesh & Easaw, 2015, p. 26), in the Indian case, a debate rages on the business models of Uber and Ola. This debate on the business model of Uber and Ola, triggered by the alleged rape of a woman client by an Uber driver (Chanchani, Gooptu, & Shrivastava, 2014; Vijaykumar, 2015), has led to a consensus on a new law to regulate Uber and Ola through the introduction of the Motor Vehicle Amendment Bill 2016. Under this, an “aggregator” has been defined as “a digital intermediary or marketplace for a passenger to connect with a driver for the purpose of transportation.” This proposal is to ensure that “services that have a direct interface with the public do not go unregulated” (Das Gupta, 2016). The country’s taxi market, valued at ₹110 billion, continues to grow exponentially (Venkatesh & Easaw, 2015, p. 31). Uber and Ola do not aim to merely appropriate the existing market but expand it, by creating additional demands. In the absence of independent third-party surveys, it is difficult to verify the figures of Uber’s and Ola’s market shares as both “spar fiercely” over this issue. While Uber professes to have 50 percent of the taxi market share in 27 Indian cities, Ola claims its dominance by contending that not only does it have 75 percent market share in these cities but also a presence in 75 additional cities (Rai, 2016a).
Uber came to India in 2013 and started operations in Delhi in 2014. It completes 200,000 trips a day (Das, 2015). Uber, which is valued at US $62.5 billion, regards India as its “priority overseas market” and has therefore increased its “resources, staffing, and technology” in the country. It currently operates in 27 Indian cities (Kalra & Shah, 2016). With high-end cars in its fleet, the market share of Uber in January 2015 was about 5 percent. But soon it made a tactical move of tweaking its approach to India by introducing cash payments of fares and low-cost offerings of Uber Go suited to the local market. This strategy has worked well for Uber (Chakraborty, 2016). The appointment of a country head (a departure from its global policy) testifies to the mass market opportunity in India (Das, 2015).
The story of Ola is linked with Uber as the business models of the two eventually converged. Bhavish Aggarwal and Ankit Bhatti, two graduates from India’s premier technology institutes, founded Ola in 2009–2010. It started in Mumbai and is now based out of Bengaluru. Ola cabs started by “dabbling in everything from outstation trips to hourly packages to point-to-point drops.” Soon after its launch in late 2010, the company dumped all distractions to focus on point-to-point drops, much like its peer Uber” (Chakraborty, 2016).
Ola operates in 102 cities. It offers a wide range of products: taxis, auto-rickshaws, and shuttle buses (Kalra & Shah, 2016). Ola has also expanded into new categories—“Outstation and Rental” (The Economic Times, 2016). Ola vehicles cover an average distance of 4,340,717 kilometers. Ola is valued at 2.5 million dollars (Venkatesh & Easaw, 2015, p. 31).
Ola expanded operations to other cities including Delhi in 2014. To its existing fleet of 80,000 auto-rickshaws and 350,000 cabs in India, in the Delhi-NCR region, Ola has introduced e-rickshaws, which are part of the Indian Prime Minister’s “Stand Up India” initiative to promote entrepreneurship. Ola has 80,000 auto-rickshaws and 350,000 cabs in India (VASopedia India, 2016).
Uber and Ola are pitted against each other as competitors. In the legion media wars, the competition between Uber and Ola plays out as a debate on nationalism wherein Uber and Ola are locked as foreign and local, respectively (Rai, 2016b). However, the competition and rivalry between Uber and Ola is of little account in the perception of both users and drivers. The distinction between the two companies is not one of substance but of nuance, and this difference is of no significant consequence for the users.
The Uber and Ola Drivers 11
Our survey of drivers revealed demographic patterns. They are all males 12 between the age group of 20 and 55 with the median age being 34. Ninety-five percent are married and reside mostly in lower middle-class colonies in North Delhi and West Delhi. They have a nuclear household of wife and children, and some of them are hopeful that very soon with increased income their parents would live with them. The drivers’ mothers and wives are homemakers, and all send their children to school.
Ninety-six percent of them have not gone to college and are mostly class 10 dropouts. Four drivers were graduates—three with a Bachelor of Arts degree and one with a Bachelor of Technology degree. The latter said he was driving to make money in order to pursue higher studies. These graduate drivers are in the age group of 20–23 years.
All drivers (except the one with the Bachelor of Technology degree) are either first- or second-generation migrants from villages mainly from the states of Bihar, Uttar Pradesh, Haryana, and Rajasthan. Their grandfathers, if not fathers, were farmers. Their extended families continue to reside in villages. Ninety percent of them have agrarian land that is being looked after by a male family member (father, brother, or uncle) while other male members look for urban jobs. The drivers’ brothers and cousins are misteries (construction laborers), peons in state or private offices, and teashop owners. Respondent 27 shared that his employer (the owner of the cab) was an erstwhile zamindar or landlord who sold off his ancestral land and invested in Uber by attaching five cars and initially drove one for a few months. He aims for further such expansion. The drivers earn between ₹20,000 and ₹60,000 a month. According to anecdotal reference of seven respondents, some drivers’ monthly incomes touch the figure of ₹100,000.
The drivers may be divided into five categories:
Those who hail from families hit by circumstance. Their minimum educational qualification is higher secondary education. Their earlier businesses have collapsed, leaving them with no resources or capital. Buying a car and attaching it to Uber or Ola is seen as a profitable business venture that does not require huge investments or long-gestation periods. The desire for a business of my own best defines this category. For instance, Driver respondent 12 relies on bank loans since accessing loans from government is encouraged by the state in keeping with the neoliberal economy’s accent on self-sufficiency and resilience. Those who chose to sell off their landed property and invest in cabs attached to Uber or Ola. From landowners (zamindars), they become taxi owners (taxidars) like Driver respondent 14. Those who were in a job that pays them enough to be roughly classified in the lower middle class. For example, Driver respondent 2 quits the job of a salesperson and shifted to Uber. Driver respondent 5 quit his job in the IT sector and joined Uber to earn more and better his lifestyle and living conditions. These educated persons seen in Uber are the respectable, lucrative, career-befitting highly qualified persons. They represent the why not drive a taxi category. Those who were auto or taxi drivers with private companies. For these individuals, shift to Uber or Ola is a way up the socioeconomic ladder. Aged 42, Driver respondent 19 was an auto driver in Delhi. Even after two decades of driving an auto, he does not own a house in Delhi. So last year, he switched to driving a personal car of a municipal official that is attached to Uber, and he hopes to buy his own car by 2019. Persons who view Uber as a fast-track opportunity to beat chronic poverty, bondage, and caste stigma. Driver respondent 11, the son of a mazdoor (poor, unskilled worker), is a school dropout. He has pinned big hopes on Uber or Ola for paying off the debts incurred by his father. It is a matter of relief for drivers like him that when they are on-boarded, their religion, and caste is never asked in documents as a policy (Das, 2015).
Traditional Taxi Drivers and Auto-rickshaw Drivers
For understanding the Uber and Ola phenomena, it is instructive to compare Uber and Ola drivers to traditional taxi drivers. Seventeen of the eighteen taxi drivers interviewed lived in Delhi on their own while their families had stayed back in villages. These drivers had attached their self-owned black and yellow taxis to taxi stands by paying a monthly rent to the taxi-stand owners. The mean age of these drivers is 50 years, that is, on an average they are about 16 years older than the Uber and Ola drivers. Age is an important factor that influences a driver’s decision to exit the traditional taxi and join a taxi aggregator. Most of the younger ones, we were told, had shifted to either Uber or Ola. The older black and yellow taxi drivers claimed that they would not switch to Uber or Ola even though the latter had significantly damaged their taxi business. Three of them mocked the Uber and Ola drivers’ reliance on GPS technology, which they deemed to be a sign of a driver’s ineptitude and poor navigation sense. According to Driver respondent 7, “Reliance on the GPS prevents the driver from improvising for shorter alternative routes when faced with problems like road blocks and traffic jams. We know the little known gullies (back lanes) of this city like the back of our hands.” Most respondents see Uber and Ola’s unspecified working hours as a serious health hazard in comparison with their relatively easy-going routine. It appears that since a traditional taxi driver works on an on-call basis, he is habituated to an unrushed pace of work with a laid-back routine. Relaxing in between rides, playing a game of cards or taking a nap, is built into his working day.
The owners of two taxi stands estimated that Uber and Ola had appropriated approximately 70 percent of the traditional taxi business forcing them to branch out into alternative business ventures (de-addiction center and real estate). The auto-rickshaw drivers also admitted how some of their former colleagues had already exited to join Uber and Ola as cabdrivers. Those who chose to stay back did so because they considered themselves not young enough to take risks. They pointed out that the shift to Uber or Ola cab is an expensive package deal that involves purchase of a car and relocation of residence to a less congested (and therefore most likely a more expensive) locality with enough space to park a car. When asked about the threat to their profession, the auto drivers’ initial response to us was one of the bravado; they felt that autos are more viable than cabs, and they are far too experienced and entrenched in Delhi to be ousted. But 10 minutes into the conversation, there was a gradual acknowledgment of the threat. They played humble and pointed out that fuel costs prevent them from further lowering fares.
Although the traditional taxis’ cash (immediate fare payment) business was severely impaired, they still managed to commercially survive because of credit agreements with their regular clients, namely, State Bhawans (state government guest houses for high state government functionaries and officials), private companies, hotels, and institutions located in the vicinity.
The taxi-stand owners shared that their major business now came from tourists (domestic and foreign) who used their white taxis that had a countrywide permit which the black and yellow taxis and Uber and Ola taxis did not have. One taxi owner said that he continues to retain only one black and yellow taxi at his stand since it is a prerequisite for the acquisition (and continuation) of a taxi-stand license. He pointed out that even as all taxi-stand owners shored up their investment in tourist taxis, in a gesture of due procedure, they retained a small number of black-yellow taxis in their fleet. Two of the taxi-stand owners shared that they were working toward closing shop and wrapping up the taxi business.
In the current situation, Uber and Ola companies are not looking for profit. In luring users through low or relatively cheaper fares and luring drivers through incentives, they are sparing no effort to make a “yoke of habit” (Biggart & Beamish, 2003) for Uber and Ola, so that eventually, all competition is wiped out. This is the sense of 90 percent of the drivers who feel that incentives and cheap fares are temporary features of the aggregated taxis that are not going to last. About 10 percent of the drivers were hopeful of the return to the good-old days of the traditional taxis. These wishes are reflective of the ethos of the socialist era and the drivers take pride in their association with users. For example, the drivers of the taxi stand in Mandi House, which is a literary and cultural hub of Delhi owing to its proximity to prominent libraries, theatres, museum, and eateries, spoke about artists and film actors who preferred their services to Uber and Ola. They reminisce about their enduring acquaintance with celebrity-clients from Bollywood and prominent theatre actors, and speak about their USP in terms of loyalty, trust, respect for clients, concern for their safety, personalized service, and willingness to accommodate requests such as carrying luggage, waiting, or going to multiple destinations. These free service overheads are not available in Uber and Ola cabs.
The Uber and Ola Users
In our database, the average age of the users is 32 years. The average frequency of Uber or Ola usage is four times in a week. Most respondents have been using Uber and/or Ola for about 20 months now. The user category is comprised of university students in possession or in pursuit of the minimum educational qualification of an undergraduate degree; professionals from the fields of journalism, teaching, information technology, law, finance social work, film makers, bankers, musicians, retailers, and businessmen and entrepreneurs. Their annual income ranges from US $9000 to US $20,000.
The frequent (i.e. a minimum of six times a week usage of the cab) Uber and Ola users are in the age group of 18–59 years. Individuals in the sixties who use Uber and Ola at least initially need the assistance of younger family members to book a ride. Even those in possession of a smart phone use the app cautiously and inform other family members (if alone at home) about booking a cab. For the younger tech-savvy individuals the trust factor is enhanced by the tracking facility in the Uber and Ola app. They consider these app-based services cheaper, efficient, reliable, and convenient, as they do not have to dial a number to call a taxi. Uber and Ola allow users to avoid hassles such as driving on traffic-congested roads, parking, and haggling of fares with auto-rickshaws.
Students use it mainly for airport travel or for leisure when they are in a group. Those in the non-student category use it mostly for leisure, nightlife, and airport commutes. Airports happen to be first contexts of connecting with Uber and Ola for many. Night usage is more common with men than women so as to avoid drunken driving. Sharing rides is not popular as the wait involved in the pick-up of the next customer causes delay (thus taking away from the Uber and Ola USP of immediate and rapid transport). Thus, sharing rides is not a norm; also, some are uncomfortable with the prospect of sharing close space with a stranger. Safety does not seem to be a major concern regarding Uber and Ola usage, despite safety concerns reported by the media, users’ trust in Uber has not dwindled. According to user 1: “Temporarily maybe but the tracking feature and other safety measures like informing your friends/family of the car number and time of departure from a place help allay some of these concerns.” Since word-of-mouth is the most effective mode of rating Uber and Ola, personal networks trump advertising and peer reviews in fostering trust in these services.
Prior to Uber and Ola, most of the users were not commuting by taxis; they were either using autos or metro. The rich were using cars. From the point of view of the Uber and Ola user, the regulated socialist economy (1950–1991) had failed to rein in the most unregulated rogue practices of auto and traditional taxi drivers, holding customers to ransom with arbitrary fares.
Though people in different income brackets are using Uber and Ola, so far, it is not a substitute for the family car. Uber and Ola are used mostly for commute to a single destination and not to multiple destinations.
Analysis:
The survey reveals that the users comprising individual consumers (not the family) are mostly young men and women. This is not surprising keeping in mind India’s demographic statistics that indicate a young population. The Uber and Ola user—a sub-category of this young India—is a privileged, professional, and urban middle-class person with a disposable income (Venkatesh & Easaw, 2015). There seems to be a consensus among scholars on the matter of defining the middle class in post-liberalization India as a class that has disposable income and indulges in a variety of forms of consumption such as education, health, shopping, cinema, eating out, travel, and luxurious modes of transport (Appadurai & Breckenridge, 1996; Deshpande, 2004; Ganguly-Scrase & Scrase, 2009; Hatekar & More, 2016; Jaffrelot & van der Veer, 2008; Rahman & Anand, 2014). Further, in the context of liberalization, Leela Fernandes (2006) argues that “the new middle classes” in India are defined in terms of lifestyles that are linked to patterns of urban redevelopment: upper middle-class housing complexes, the rise of shopping malls and the expansion of the leisure industry and service sector.
The dovetailing of Uber and Ola to a consumerist lifestyle in the context of the reconfiguration of urban space is borne out by our survey of users. Our interviews with the users confirm that a market for Uber and Ola already existed and that Uber and Ola fit into the existing lifestyle and consumption patterns of the users. The reasons for this are as follows: (a) the functionality of Uber and Ola because of efficiency and affordability; (b) the self-activating upward mobility from auto-rickshaws to cabs (note that none of these users have switched from taxis to Uber and Ola; they were either private transport users or auto-rickshaw users before Uber and Ola); and (c) the perception of Uber and Ola as a branded service in itself that can be consumed. Uber and Ola are using this ethos created in this phase of the Indian economy as an opportunity. Hence, the starting point of the story of the Uber Ola revolution in India is urban, rich, and educated consumers.
The drivers interviewed view Uber and Ola as providing an opportunity to script a prosperous future. A person’s desire to work for Uber and Ola is nourished by his aspirations and a belief that more hours of work means more money, own car, and a better life. Those who already own a car hope to attach more cars to Uber and Ola before long. Those, who either lease from Uber and Ola or drive their employer’s car for a fixed salary, feel that a major milestone for them would be to buy their own car and attach it to Uber and Ola.
Driver respondent 24, who completed his secondary education in 2007, was a peon in an office before he took to driving with Ola in 2014. But he changed lanes and went to Uber because of its reputation as a “world-famous” company. His decision to drive cabs was fueled by the prospect of working in a respectable and non-abusive environment without bosses and work flexibility. Uber’s prodigious brand appeal could be credited with raising the status of the traditional cab driver, Driver respondent 30, admitting his preference for Uber says, that it is not just about the monetary factor.
There are two modes of fare payment for an Uber and Ola user: cash or online (through Paytm or credit cards). Uber exacts 20 percent as its commission on every ride and 5 percent by way of sales taxes. Since the drivers tend to receive payments, both in cash and online, Uber has developed a system through which it can exact its cut of the fares earned.
A driver, who attaches his car to either Uber or Ola, operates on the basis of “Target-based incentives.” In the Uber and Ola model, the wages or the working hours for the drivers are not fixed but the percentage of incentives is. A driver is assured a particular sum of money provided he completes a specific quota of trips that, in turn, are determined by the incentives he choose to work for.
These cash-based incentives, to be fulfilled on a weekly basis, could be in the range from ₹1000 to 3000. To avail of an incentive, the driver must fulfill a corresponding target of a certain number of completed trips daily. The target has to be met every day of that week for the driver to be able to claim an incentive. A certain number of peak hour bookings must also be clocked every day. The system, in this way, circumscribes the degree of flexibility of wages and working hours for drivers. Most drivers are “pushed” to work round the clock to meet targets and be eligible for weekly incentives.
At first glance, drivers appear to be the happy beneficiaries of Uber and Ola’s business model, but presently, most of the Uber and Ola drivers do not own the cars they drive. This tweaked Uber model for the Indian market allows the middle-class individual—the police official, bureaucrat, property dealer, transporter, or a professional—an entry into the aggregated taxi market. Thus, the benefits (incentives) of Uber and Ola do not go to the driver, but to the already well-off owners. Thus, taxi drivers are employees of taxidars or taxi owners. Drivers work on a fixed salary of about ₹15000–18000 per month. The owner gives a commission to the driver if the latter works extra hours. Uber’s incentive for peak hour driving and additional rides accrues directly to the owner even though it is the driver who is registered with Uber.
Both degree holders and school dropouts see in Uber and Ola an opportunity that gives them an income hitherto available only to the highly educated, that is, doctors, lawyers, and engineers. Not surprisingly, drivers are making it to the category of the Indian middle class (Hatekar & More, 2016).
Those who have completed secondary level education as well as those who have not look at Uber and Ola as a fast-track employment that compensates for low educational qualifications and clears the way for entering the job market. This job ensures regular income, expedites paying off debts, and enables mobility and dignity of life. Driver respondent 9, a school dropout, who tried his hand at a variety of jobs for nearly 6 years, heaved a sigh of relief at landing a driver’s job with his employer who has attached three cars to Ola. He is certain that prior to Uber and Ola, the chances in the job market for a school dropout were grim. A respectable job was an unrealizable dream.
Perceptions of the relation among educational qualifications, employability, availability of jobs, and dignity are critical in understanding the appeal of Uber and Ola. This is not to suggest that in the drivers’ perceptions, the value of education has diminished. Recognizing the high status of education as symbolic capital and its worth for economic and social mobility in India, Ola has tied up with EduKart, an education market place that offers a platform to education seekers. 13 With this partnership, Ola’s driver partners and their families are given access to higher education (The Indian Express, 2016a). This act can be read in two ways: (a) It is an intelligent promotional strategy involving a driver’s family to attract him away from Uber and secure them; (b) At another level in the long run, it also helps Ola project an image of corporate social responsibility, thus diluting the criticism elicited by the company regarding working conditions, health insurance, or pensions of the drivers.
Drivers look upon Uber and Ola variously as an investment, a business venture, a way out of debts, a source of a stable income and a fast track for social and economic mobility. At a minimum, Uber and Ola make possible a wage breakthrough by enabling a driver to live in Delhi on a solo income in a rented accommodation of a single-room in an overcrowded lower-class locality.
Conclusion
Critics point out that contrary to the claims of providing prosperity and entrepreneurship, Uber and Ola are offloading risks and creating precarious jobs (Venkatesh & Easaw, 2015, p. 28). However, the nascent stage of Uber and Ola enterprises in Delhi must be kept in mind while analyzing their performance in fulfilling the expectations and promises of the sharing economy—employment generation and ecological sustainability.
An overburdened public transport system (note that in Delhi the shortage of public transport is graver than access to public transport) and the weaknesses (inefficiency and arbitrary fares) of other traditional market providers created an opening for Uber and Ola beyond the “app;” it is not merely the proliferating numbers of cell phone users that have made possible the Uber and Ola phenomena.
There is no doubt that drivers have found new avenues of employment in Uber and Ola. However, all Uber and Ola drivers’ jobs are not additional jobs in Delhi as Uber and Ola have also led to the closure of traditional taxis and reduced their business along with that of the auto-rickshaws. Some of the displaced traditional taxi and auto-rickshaw drivers have found employment in the new Uber and Ola jobs. Uber and Ola have created new owners who were formerly either self-employed or had landed property that they sold off to invest in Uber and Ola. There is also the migrant, first-time driver of Uber and Ola, drawn to these cabs because of the prospects of high income, incentives, and hard work accruing rewards.
Our survey also revealed some downsides to the nature of Uber and Ola employment that detract from its promised prosperity. The social background of these drivers indicates that Uber and Ola have created a new segment in the lower rungs of the urban employment ladder. The promised rags to riches trope of Uber and Ola are targeted at the ones “who are not yet prosperous” but have the capital (including the social capital of community and networks) to qualify entry into this Uber and Ola sector. Though a job with Uber or Ola enables these entrants to escape debts, eat two square meals every day, 14 educate their children, and enjoy some degree of consumptive leisure, they feel that this is only the first step toward their ultimate goal of maximizing the opportunities of prosperity and entrepreneurship created by Uber and Ola. Some drivers, in a bid to increase their income and move out of a fixed salary mode, have taken loans to buy their own car.
Unpacking the entrepreneurship aspect of the Uber and Ola employment of drivers one discovers that it lies in taking risks in the hope that before falling prey to ill-health they would make enough money to take care of themselves and their families (Anderson & Um, 2015). An Uber driver, a former traditional taxi driver, shared that though he was making more money now, he was also working much harder and driving for longer hours (respondent 3). The Uber and Ola drivers have to accept the risk of possible accidents without insurance coverage or support in case of legal battles. Keeping with the individuation ethos of the neoliberal economy, the Uber and Ola driver has come to believe that he is constrained not by social structures but by his own ability and hard work (Harvey, 2007).
When asked about the health effects of driving Uber and Ola cabs, most drivers told us that they are “perfectly” fine as there are no negative effects on their health. However, some of them admitted that their sleeping and eating patterns have become erratic since they start their day at about 5.30 am and work daily for an average of 10–12 hours. The average numbers of trips they clock daily are in the range of 10–15. They usually carry home-cooked lunch, but there are no fixed lunch hours so they have to grab a bite in between rides. Fatigue, stress, hunger and sleep deprivation are perceived as temporary conditions without long-term repercussions for health. At this point in their lives, the “long term” or future is only about aspirations of material success and their children’s welfare. Driver respondent 39 has instructed his wife to always fulfill their children’s demands for food, as he does not want them to experience the agony and humiliation of deprivation, which he had lived through. The tradeoff between income and health is built into the business models of Uber and Ola whereby drivers look at maximizing their gains in accordance with the principle of more work, more pay, and greater incentives.
A key expectation from Uber and Ola as sharing economy enterprises would be that they offer an ecologically sustainable solution to Delhi’s traffic jams and air pollution. Uber and Ola have so far not made a dent into these fundamental problems. Uber and Ola cabs have come to contribute to the traffic jams and encroach on the limited free parking space particularly in the already busy sectors of the city. The number of private vehicles on the city roads has not declined (Angre, 2014). Thus, existing assets are not being used since the Uber and Ola cabs are newly purchased first or second-hand cars; these are not unused assets. The private car has not been displaced, as it works out cheaper than the Uber and Ola cab fares. Also, the concept of sharing rides has not taken off.
Uber and Ola have entered the market recently—2 and 3 years ago, respectively. Judged on this yardstick their capture of the taxi market is remarkable. The journey of Uber and Ola so far is too short to make a prediction about their future—the entry of new competitors and state regulation could stem their further growth, but clearly the phenomenon of the taxi aggregator, it appears, is here to stay. The arrival of more players on the aggregated taxi scene and their resultant rivalry is likely to yield fare benefits for the user. The driver on the other hand may see a reduction in his income as a taxi aggregator may withdraw incentives so as to finance its cheaper deals for the user. The scale of unemployment (The Indian Express, 2016b) in India will guarantee an always-available workforce ready to labor on the employers’ conditions. Uber and Ola are expanding beyond the major metropolitan cities to state capitals. Urbanization of the hitherto mofussil towns and their aspirational residents (Bhatia, 2010) presents new lands of opportunity for taxi aggregators. Uber and Ola by virtue of being pioneers in the field could have a head start in seizing these new market segments. In doing so, Uber and Ola will be generating new jobs (including that of the drivers and call center employees), and accelerating the creation of more and new users.
Footnotes
Acknowledgements
We thank Professor Anil Hira and Professor Katherine Reilly for their compelling observations, close scrutiny, and valuable comments on this article.