Uber announces zero commission model for autorickshaw drivers in India

Key Highlights:

• Uber now allows auto-rickshaw drivers in India to keep 100% of their fare.
• Instead of commission, drivers will pay a subscription fee.
• Drivers and riders will negotiate fares directly.
• Uber will still assist with safety-related issues.
• State governments like Karnataka and Maharashtra have introduced regulations on ride-hailing services.

Uber has announced that auto-rickshaw drivers in India will now keep 100% of the fare they earn. The company will no longer charge any commission on rides. Instead, drivers will pay a subscription fee to use the platform. Uber used to take a 10-15% commission from auto-rickshaw drivers, but with the new policy, drivers now keep 100% of the fare. 

This change aligns with the approach of local competitors like Rapido and Namma Yatri, who also use a subscription model. Uber stated that this shift helps them stay competitive in the market. For Uber users, the main change is that Uber will now only connect them with nearby auto-rickshaw drivers. Uber will no longer be involved in setting or handling fares. The platform is simply a way to connect riders and drivers.

Drivers will operate independently, which means Uber won’t be part of any fare disputes between them and the riders. However, Uber will still assist in case of any safety concerns. Essentially, Uber’s role is limited to providing the connection, while the rest of the service, including the fare and payment, will be between the rider and the driver.

If a user has any safety-related concerns during an auto-rickshaw ride, Uber advises them to report the issue through the Uber app. The company mentioned that its team will review the incident promptly to address any safety concerns. Shaik Salauddin, the national general secretary of the Indian Federation of App-based Transport Workers (IFAT), did not directly comment on Uber's new policy change. IFAT also stated that it will closely monitor the impact of Uber’s new model on auto drivers’ earnings and working conditions.

No Cancellation Fees

For an auto-rickshaw ride on Uber, the company will suggest a fare, but the final amount is something the rider and driver must agree on. Uber recommends that riders have to discuss any concerns directly with the driver, as they are familiar with local conditions. Additionally, Uber will not charge any cancellation fees if a rider decides to cancel the ride.

The high commission fees charged by ride-hailing apps like Uber and Ola have been a major concern for drivers, leading to several protests in recent years. This conflict between platform aggregators and local transport worker unions has contributed to the rise of alternatives like Namma Yatri, a platform hosted on the government-backed Open Network for Digital Commerce (ONDC).

Several state governments have taken steps to regulate app-based cab and auto-rickshaw aggregators. Last year, the Karnataka government issued an order banning dynamic pricing for ride-hailing services and set uniform fares for both app-based cabs and city taxis.

In January 2024, the Maharashtra government proposed regulations for app-based cab aggregators, including caps on surge pricing and cancellation charges, among other measures. Meanwhile, Delhi's cab aggregator policy required companies like Ola and Uber to register and acquire a license to operate both delivery and taxi services in the capital. These regulatory efforts aim to bring more structure and fairness to the ride-hailing industry.

Auto-rickshaw riders should now make direct payments to the driver, as in-app transactions will no longer work for rides booked on Uber. This means that even if you book the auto-rickshaw through the Uber app, the payment for the ride will be handled directly between the rider and the driver.

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CMV360 Says

Uber’s move to a subscription model might also bring more transparency to the process. However, the success of this model depends on how well it balances driver autonomy with the safety and satisfaction of riders.