High attrition rate amongst drivers might be a good thing for Ola and Uber

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There was a time when a driver associated with cab aggregators Ola and Uber used to earn as much as Rs 1 lakh per month.
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However, as moneybags started to shrink, these earnings started to decline, which led to more and more drivers ending their association with the companies.

As per analysts and company executives, in the past two years, more than 10,000 drivers have left Ola and Uber in Bengaluru alone, citing lower incentives. Moreover, even the number of new driver registrations has also gone down from 300-350 a day in 2016 to 40-50 across Bengaluru, Mumbai and Delhi.

Even so, the analysts told ET, that the slowing growth in the numver of drivers is a positive sign, showing that the market is finally maturing and stabilising.

"Newer drivers coming on board are aware that the incentives and salaries offered are lower than what they were last year. They are more prepared to work longer hours for lower wages in the pursuit of owning a car in the long run," said Jaspal Singh, partner at Valoriser Consultants.
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As of now, Ola operates in 102 cities with about 550,000 drivers while Uber has operations in 29 cities with about 400,000 drivers. However, analysts believe that not more than one-third of these drivers are likely to be working actively.

An Ola executive, requesting anonymity, said that this downfall in the number of driver registrations has not effected the company much.

"Now the market is maturing. The drivers who are likely to stick are often younger drivers who were working at even more unsatisfying jobs and are willing to put in the additional amount of time so they can be independent car owners after working four-five years with Ola, Uber or both," this executive said.


(Image source Qz)
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