Top ride-hailing firms experiment with subscription models to retain drivers and tackle competition
Ride-hailing firms such as Ola, Uber, and Rapido are experimenting and launching subscription models for their driver partners to increase retention rates and maximise driver earnings as demand for new aggregators who promise zero-commission charges accelerates.
“The zero commission model has been introduced for both autorickshaws as well as cab services. We’ve witnessed a remarkable 20% increase in the number of captains opting for our SaaS-based platform, which is indicative of their positive reception to our innovative business model,” a Rapido spokesperson told Moneycontrol. (Captain is Rapido’s term for a driver-partner; SaaS stands for Software-as-a-Service.)
The primary goal is to ensure equitable advantages for captains across multiple modes of transportation, the spokesperson added.
Another top ride-hailing firm has also started experimenting with a subscription model with auto and bike-taxi drivers. “We are testing some features in Hyderabad and Bengaluru. So far, the adoption has been good. We will need a little more time to launch it across the country,” an executive at the company told Moneycontrol, on condition of anonymity.
Changing market dynamics
App-based aggregators Ola and Uber launched their services in 2012-2013 and initially promised lucrative monthly earnings, even enticing white-collar employees to become drivers.
However, over the years, app-based aggregators have faced driver discontent after the initial promised incentives came down and platforms started imposing commissions. To be sure, these commissions play a pivotal role in managing the platform, maps, and other expenses. Platform charges are one of the key sources of revenue for these platforms.
Drivers are getting attracted by the ‘zero-commission’ model promised by new-age ride-hailing firms such as Namma Yatri, Myn and Yaary.
According to cab unions that Moneycontrol spoke to, Ola and Uber are now facing stiff competition in Hyderabad. This is after the launch of Yaary, Namma Yatri, Volta, and Ok Chalo in the city.
