Cab drivers are struggling big time. Isn’t it?

Cab drivers are struggling

Here’s the dark side of being a cab drivers in India!! A faulty business model by the company which has doomed the cab drivers for life. Recently, while talking to one of the drivers associated with a reputed cab aggregator, I learned about a business model the organization has in place to empower new poor drivers to get on-boarded with the firm.

Here’s the scenario- The firm would give a new car to the driver and sign a bonded contract for 3 years. In return the driver will have to pay Rs. 1100 /day as a daily rent to the organization. The cab aggregator will offer more rides to the driver (top line being Rs. 3000 /day for working over 12 hrs a day), to entice more drivers to join this scheme. More drivers join in without thinking much and end up working 365 days a year to pay the daily rent of Rs. 1100 /day.

Here’s why this business model is faulty – Daily earnings for the cab aggregator:1100 (rent) + 25% of 3000 ( Rs 750 commission ) = 1850 Daily earnings for the driver: 3000 – 750 -1100 – 500 ( fuel) = Rs 650 only. Since it’s a bonded contract, the firm will earn: 1850*30*12*3 = Rs. 19,98,000 in 3 years. Isn’t this an exploitation?

Let’s at least tip the drivers (2% of the total fare), next time we board a cab. Rs 650/day isn’t just not enough to survive!!