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Uber is moving away from its commission-based model for three-wheeled auto rickshaw drivers in India in response to increased competition from local rivals Rapido and Namma Yatri. The ride-hailing giant will instead charge drivers a daily fee to use the platform and connect to riders.\u00a0<\/p>\n
The business model change is the latest update to Uber\u2019s business in India in an attempt to make the margins work. <\/p>\n
In 2015, Uber first launched its auto-rickshaw<\/a> service in the market, but suspended shortly after<\/a>. The service was later relaunched<\/a> in 2018.<\/p>\n India isn\u2019t the only market where Uber is trying out this model, we understand. The company earlier introduced\u00a0its subscription-based bike and auto rickshaw services in Bangladesh and some Southeast Asian markets, a spokesperson for Uber confirmed to TechCrunch.\u00a0<\/p>\n The update, which was communicated through an email to riders, is hitting all auto-rickshaw drivers in India after quietly running it as a pilot for some months. Auto rickshaws cover up to 25% of all motorized trips<\/a> in India.\u00a0<\/p>\n Uber\u2019s commission charges are typically between 25%-40% of each ride fare, though the company says<\/a> its service fee \u201cvaries from trip to trip.\u201d Rapid and Namma Yatri don\u2019t charge a commission; their model is more subscription-based.<\/p>\n Now Uber is following suit. Auto rickshaw drivers on its platform in India need to pay a fee between $0.23-$0.46 (20-40 Indian rupees) per day, depending on the city they are in, TechCrunch understands.<\/p>\n As Uber has done away with commissions for autorickshaw drivers, riders will need to pay the driver directly in cash or digitally via the Indian\u00a0government-backed Unified Payments Interface (UPI). Uber credits and promotions will not apply for auto trips, and riders will not be levied with cancellation charges.<\/p>\n Uber will also not show the final amount riders will have to pay at the end of their trip \u2014 instead, it will just suggest a fare, and the driver can set their own rates. <\/p>\n \u201cWe\u2019re not involved in fare-related disputes between riders and drivers,\u201d Uber noted<\/a> on an FAQ page, suggesting haggling will become common among autorickshaw drivers and riders.<\/p>\n In addition, Uber said it would continue to allow riders to raise safety concerns through its app. <\/p>\n While it\u2019s unlikely this model will translate to other markets like the U.S., the change reflects Uber\u2019s mission of connecting independent contractors to riders.<\/p>\n The update is limited to auto rickshaws, meaning four-wheeler cabs in India still operate under the existing commission model. <\/p>\n However, Uber continues to experiment with different models in more traditional ride-hailing, including a flexible pricing service<\/a> in over a dozen Indian cities and concurrent rides<\/a> to stay competitive in the world\u2019s most populous market. Today, Uber faces stiff competition from the likes of SoftBank-backed Ola, WestBridge Capital and Nexus Venture Partners-backed Rapido, and Google-invested Namma Yatri, as well as various independent auto rickshaws and taxi drivers.<\/p>\n<\/div>\n