New Delhi, February 18, 2025.
In a move aimed at staying competitive, Uber has announced that it will transition to a zero-commission model for its autorickshaw drivers in India, news agency Reuters reported. The company will now charge drivers a subscription fee, aligning with the strategies of local rivals as competition in the ride-hailing space intensifies.
Subscription-based fee structure
According to a company blog post, Uber will no longer charge drivers a commission on fares. Instead, it will connect users with nearby drivers and suggest a fare, but the final fare will be determined by the driver and rider. A company spokesperson explained that the decision was made to avoid putting Uber at a “competitive disadvantage” in the market.
Growing driver discontent
The shift comes amid growing dissatisfaction among drivers, who have protested high commissions charged by ride-hailing platforms like Uber and its competitor, Ola. The frustration over commission rates has led to protests from drivers in recent years, highlighting the need for a more driver-friendly pricing model.
Competition from smaller platforms
Uber’s new approach mirrors that of smaller competitors, such as Rapido and Namma Yatri, which have already adopted subscription-based models. These platforms do not charge commission fees to their autorickshaw drivers but instead collect a daily or weekly subscription fee.
Changing tax policies and business strategies
Ride-hailing platforms are also seeking clarity on tax liabilities after an authority’s decision that a model like Namma Yatri, which connects drivers with users, would not be required to pay taxes, as reported by several local media outlets last year.
This shift in tax policy has prompted many ride-hailing services to reassess their business models, particularly in light of varying regulations across different Indian states, especially regarding fares.
