This article is supported by SVP Cities of India Fellowship
“Madam, all I want now is a job that will help me meet my monthly expenses. That is all.” The worry in Sridhar’s voice and the desperation on his face as he says this, cannot be captured in words.
Sridhar’s story is similar to that of many, who in their late teens or early twenties moved to Bengaluru in search of a job, often leaving behind ageing parents and small plots of farmland in their villages.
Every year, thousands migrate to Bengaluru in search of a livelihood, to support themselves and their family back home. With low levels of education and skills, many of them start working in the informal sector.
Informal sector employs the majority in our country, usually without offering any security, substantial wage hike or benefits. Workers’ income remain stagnant, and their health is often compromised.
But the sector continues to grow in India as more people transition from agricultural to non-agricultural jobs. In this series, we look at the stories of those who work largely in the informal sector, why the majority of them can’t become part of the middle class despite working their entire lives, and possible solutions to this problem.
To Bengaluru as a teenager
A native of Valagerepuru village in Kunigal taluk, around 100 kms from Bengaluru, Sridhar is the younger of two brothers in a family of seven. Though he managed to complete 10th standard in a school in the nearby village, he did not attempt 12th standard exams. Instead, he came to Bengaluru in 1994-95, in search of a job.
Though his brother had already moved to Bengaluru, Sridhar did not want to depend on him and hence shared a small room with a friend. With no knowledge of English but determined to make things work, he took up different types of jobs – as a helper in a small manufacturing unit, tailoring, and so on.
After a couple of years, Sridhar got a professional driving licence and became an auto driver. A few months later, he started working as car driver for a family in Bengaluru, and stayed with them for over a decade, till 2011. After his employers passed away, Sridhar started working as an independent on-call taxi driver.
Ola and Uber come into the picture
In 2012, Ola Cabs started operations in Bengaluru. Uber did so a year later, in 2013. Earning Rs 9000 a month as an independent taxi driver, Sridhar saw the possibility of earning five times more, depending on the time he spent on duty with Ola. He had already bought a second-hand car in 2011, with his family’s support including by mortgaging his wife’s jewellery.
The reason was simple – when Ola Cabs entered the market, it promised lucrative daily and weekly incentives to drivers aka partners. Added to this, was the bait that the drivers could be their own boss, and choose the hours they worked. The entire package was tempting enough for many to leave their routine driver jobs, take loans, buy second-hand cars, and drive people around the city nearly every day.
As per the Ola website, nine lakh vehicles and 10 lakh driver-partners are currently registered with them, across 110 cities. The numbers for Uber are not easily available, but a February 2018 article in Quartz India indicated that Uber had only half as many drivers affiliated to them as Ola.
A bachelor when he first came to Bengaluru, Sridhar’s expenses had grown over time as well. His expenses doubled after his marriage in 2007, since he then had to rent a house and provide for his wife. The next leap in expenses came when his first child was born in 2010. It was around this time that Sridhar had to start working as an independent taxi driver. He started taking loans to make ends meet; by 2014, he had loans of nearly Rs 2.5 lakh.
Ola, therefore, came as a godsend. As an early entrant, he was able to cash in on the incentives, and clear some of his loans.
But the long hours of driving on Bengaluru’s fractured roads took a toll on Sridhar’s health, and on his vehicle too. But Sridhar was not aware of it, at least not initially.
Here is a comparison of Sridhar’s earnings as an Ola/Uber driver over the years, and his current job as a driver on contract with a government department:
|As an Ola Driver in 2012-16||As an Ola / Uber driver in 2016-18*||Driver on contract with govt dept, since June 2018|
|Working hours||15 – 18||10 – 12||10|
|Working days||Seven days a week; a day off only when too tired, or for personal work||Six days a week||As per government schedule – five days a week on average|
|Average kms covered daily||150 – 200||Minimum 100 kms to get Rs 500 per day||60|
|Rate per km||Rs 14/km plus incentives||“Slabs would change arbitrarily – targets would be very high and difficult to reach almost every day”||Fixed wages|
|Average monthly income||Rs 60,000, going up to Rs 80,000 occasionally||Rs 20,000-25,000
Income from Ola reduced gradually but drastically; all benefit passed on to customer
|Rs 30,000 consolidated|
|Expenses related to his work^|
|Cost of diesel/day||Rs 750||~Rs 700, because of fuel price hike||Rs 400|
|Food/day||Rs 200-300 (From hotel, thrice a day)||Rs 150-200||Rs 50|
|Vehicle maintenance/month||Rs 5000||Rs 3500||Rs 2500|
|Monthly work-related expenses||Rs 36,500||Rs 28,500||Rs 12,850|
* He worked as an Ola Auto driver for a few months in 2017-18 while also driving his cab
^ These do not include his household expenses
Everyday reality – the need for money to meet short-term needs – makes it hard for those like Sridhar to plan for the long term. While he had the mandatory insurance for his car, he had not planned for health insurance for himself or his family. His family grew again with the birth of his second son in early 2018, as did his expenses towards his family and towards maintaining his car.
For those who joined Ola and Uber, especially in the initial stages of their operations, the honeymoon period lasted only a couple of years. Once the economics of demand vs supply came into play, as also the aggregators’ desire to show less losses if not marginal profits, things became difficult for most drivers.
Sridhar’s case was no different. Though he made good money in his initial days with Ola, things started getting difficult as the company became stringent in its review of drivers’ performance. A single apparent infringement could bring down the driver’s star rating, which would disqualify him from the incentive scheme of the day/week. This leads to lower income, often due to no fault of the driver.
Even when Sridhar was earning around Rs 60,000 per month as an Ola driver initially, his work-related expenses came to over Rs 30,000. That is, he was taking home only less than Rs 30,000 per month.
Gradually, as Ola changed its incentive structure, Sridhar’s earnings went down to around Rs 25,000 per month. However, his work-related expenses were higher, at around Rs 28,000. His expenses back home were increasing too, for purposes like his first child’s schooling. Continuing as an Ola/Uber driver was becoming unviable for Sridhar.
Health issues like diabetes, leg and back problems added to his woes. By then, he had to borrow money just to make ends meet. He finally took the decision to exit both Ola and Uber, and resumed work as a taxi driver. His debt runs to a few lakhs now.
According to a Times of India report last July, “the growth rate of taxis hit a four-year low in 2017-18”. The number of new registrations had dropped to 12 percent that year, from 30 percent the previous year. The article added, “Experts say dip in the growth rate is mainly due to reluctance of new drivers to join app-based cab aggregators like Ola and Uber due to reduced earnings and overwork.”
‘State of the Online Cabs Market’, a 2017 report by the consulting firm RedSeer, also observed a “sharp drop in driver income” due to the reduction in incentives and in the number of rides per day.
Sridhar currently has a contract with a state government department to provide chauffeur service. He drives his own car to ferry the assigned official. He is paid Rs 30,000 per month, which is almost the same has his monthly expenses. Vehicle expenses including diesel and maintenance are borne by Sridhar himself.
This could well be the story of many – middle-aged drivers and family men who were happy when cab aggregators launched in Bengaluru, but are today stuck in a spiral of debt and financial commitments.
The drivers’ dissatisfaction is evident by their protests against the aggregators. Early 2017 saw large-scale protests in Delhi and Bengaluru – drivers went off duty for over 10 days, and protested on the streets against the aggregators’ incentive system which they felt was ‘erratic’ and impacted their monthly earnings.
Though the strikes were called off, most demands of the drivers were not met. Strikes have continued in different parts of the country since then, such as the one in Mumbai last October-November.
Conversely, there are drivers who have chosen never to tie up with cab aggregators. A middle-aged driver in the city says, “I do not want that stress. I am happy earning what I can being an independent driver.”
Yet, cab and auto drivers who have already entered into agreements with aggregators, have no choice but to continue working, through strikes and through service bans by the government.
This March, after the Karnataka government issued a 6-month licence suspension to Ola, an Ola Auto driver, said, “What can we do? We have our personal commitments; we have to earn everyday. We have to serve customers, and pay bribes if caught…”
In the meantime, Sridhar is considering selling his car to clear some of his debts. If he does, he will have to start working for a taxi owner or a family that owns cars, as he once did, long back.
[Corrigendum: Errors in the table, under the section ‘Expenses related to his work’, have been corrected. Data on ‘Monthly work-related expenses’ under this section has been corrected, and that on ‘Vehicle maintenance/month’ added.]
This article is supported by SVP Cities of India Fellowship. This is the first part of a series on livelihoods in Bengaluru