Ola, Uber Strike Highlights Tough business Model Of Cab-Hailing Firms

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A strike this week by drivers of Ola and Uber turned out to be a damp squib, but highlighted the tough business model of cab-hailing platforms that requires them to squeeze drivers to generate higher margins, analysts and drivers said. On Monday, drivers at Ola and Uber went on an indefinite strike to protest against low incomes, but apart from Mumbai, cab drivers in other major cities didn’t participate in the strike in large numbers.

Sanchit Vir Gogia, the founder and chief executive at consultancy Greyhound Research, said cab firms have shifted focus from increasing capacity to improving utilization of their existing fleet, which will result in a drop in supply.

“Our estimates suggest that in the next 12 months, 25-30% of the pool of drivers with these companies will not exist anymore simply because there isn’t enough demand to be catered to. This is contingent on the fact that status quo is maintained in terms of incentives schemes,” Gogia said.

[HT Mint]

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Sanchit Vir Gogia: Sanchit is the Chief Analyst, Founder & CEO of Greyhound Research, an award-winning global research & advisory firm. To read more about him, click here.

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