As compared to other cities in India, the driver earnings are much lower in Bengaluru due to rise in the wait times. Karnataka Government recently introduced the regulatory caps on dynamic pricing which has resulted in the low earnings along with slow growth in Compressed Natural Gas (CNG) adoption, a top executive from Uber said.
“A Bangalore driver today makes 8-15% lower earnings versus a comparable vehicle in a city like Hyderabad, the net take-home is 20-25% lower. The CNG infrastructure hasn’t scaled up here, most are running on diesel. So the cost of operations of a vehicle are higher than Mumbai or Delhi, where the CNG penetration is deeper,” said Prabhjeet Singh, Head of Cities of Uber India and South Asia. This information, he added, was based on two months of data from a study they undertook in 2019.
Karnataka has set a maximum and minimum price for taxi aggregators depending on the vehicle’s price. There have been many protests against the system of’ surge pricing’ or’ dynamic pricing,’ resulting in exceptionally elevated prices during peak hours. Singh commented on this system: “There should be a market where pricing can be adjusted depending on the demand and supply scenario.”
Dynamic pricing, he added, enables riders to demonstrate the fare they can get in a specific region, which in turn enables them to decide whether to come online or go offline or make decisions such as driving to a place where there is a probability of earning more. It also enables drivers to decide whether to wait an additional couple of minutes to modify rates.
According to Singh, dynamic pricing is the subject of only one out of every five journeys across India. However, he pointed out, the average amount of journeys that rise in Bangalore are much greater.
Dynamic pricing, he claimed, “leads to better use of the asset.” Referring to a notion of’ wild goose chase’ outlined in a published research paper, he said that if dynamic pricing is turned off, “as a scheme, you will end up completing smaller and smaller journeys.” That would be the case, he explained, because the driver would spend more time picking up a passenger compared to finishing a journey. If the prices are constantly high, lesser customers will ask for the cab.
On the fare laws implemented, Singh said he thinks that they have been implemented “with the intention of being consumer-friendly.” He added, however, “there is a reduced and lower incentive (for riders) to drive during the peak hours,” and the fuel and time spent on the highway are not adequately compensated.