Uber has announced a major shift in its operations in India, transitioning to a cash-only model for its auto-rickshaw services. The move comes as the ride-hailing giant faces increasing competition, service disruptions, and driver and user’s dissatisfaction across the country.
Effective February 18, 2025, Uber’s new model replaces the traditional commission-based system with a subscription-based platform, allowing auto drivers to keep the full fare from their rides while paying a fixed fee to Uber for access to the app.
The change aims to address concerns raised by drivers, who have long complained about high commissions and lack of control over pricing. Under the new system, the Uber app will suggest fare estimates, but final payments will be determined through direct negotiation between drivers and passengers. The company has also ceased facilitating digital payments for auto-rickshaw rides, making cash transactions the only available option.
This model mirrors strategies used by competitors such as Rapido, which already charges drivers a daily platform fee instead of commissions.
While Uber describes the transition as a necessary response to market competition, users have raised concerns over service reliability. Ride cancellations, delays, and a shortage of available drivers have become increasingly common, frustrating commuters. Many passengers have reported drivers canceling rides after learning the payment method or requested destination, leading to inconvenience and uncertainty.
A recent survey indicated that nearly 85% of Uber users in Bengaluru had experienced issues with cancellations and surge pricing, with similar reports from Ola users.
The broader ride-hailing industry in India is grappling with declining profitability as competition intensifies. Drivers, facing rising fuel costs and declining incentives, have become increasingly selective about the trips they accept. As a result, passengers often find themselves stranded or forced to wait longer for their rides.
Regulators are also taking note of these ongoing issues. A government panel recently proposed penalties for drivers who cancel rides and suggested compensation for affected passengers. While such measures could help improve accountability, industry experts believe structural reforms are needed to address the root causes of driver dissatisfaction and service inconsistencies.
Uber’s cash-only auto service marks a shift in strategy, but it remains to be seen whether this change will ease tensions between drivers and the company. As the Indian ride-hailing market continues to evolve, the future of app-based transportation in the country hinges on balancing profitability, service quality, and user satisfaction.
Leave a Reply