The decade-old cab hailing model seems set to be changing in India.
Ola is moving to a zero-commission model for its drivers. Thus far, Ola took a 15-20 percent commission from the total fare from its drivers partners. It’ll now instead pass on the entire fare to its drivers, and charge a daily or monthly commission from them.
“The launch of the 0% commission model pan India marks a fundamental shift in the ride-hailing businesses,” Ola said in a statement. “Removing commissions empowers driver partners with much more ownership and opportunity. They are the backbone of the mobility ecosystem and giving them complete control of their earnings will help in creating a more resilient and sustainable ride-hailing network across the country,” it added.
Ola has rolled out 30-day passes for Rs 67 per day. This means that drivers can book unlimited rides — and keep the entire fare — by paying Rs. 2,010 a month.
The move comes after similar subscriptions were tried out by ride hailing companies for auto drivers. Namma Yatri and Rapido had begun charging auto drivers a similar subscription, while passing along the entire fare to them. More recently, Uber and Ola had also shifted to the same model for their auto rides.
Ola, however, has now moved its cabs to the same subscription-based model. This model could lead to greater driver loyalty — drivers currently use multiple apps and drive for whichever app gives them a ride, but paying a subscription could mean that paying for two separate subscriptions might not make financial sense, so they could stick to just one. Also, drivers who work long hours and on weekends will stand to make more money, as for a fixed subscription, they’ll be able to get as many rides as they can and pocket the entire fare. It’s unclear, however, how this model will impact fares — it’ll depend on how many rides the median driver is able to take with the subscription fee, which in turn will impact the supply for cabs. But it’s a pretty major change in how the cab hailing industry works in India, and can lead to some shifts in how millions of Indians take cab rides every day.