Rising Petrol and Diesel Prices Eat Into Cabbies’ Lunch Money
Uber and Ola cabbies face a tough time with falling incentives and rising fuel prices.
Uber and Ola cabbies face a tough time with falling incentives and rising fuel prices.(Photo Courtesy: Reuters/Twitter/@OlaCabs)

Rising Petrol and Diesel Prices Eat Into Cabbies’ Lunch Money

Rising fuel prices and falling incentives from cab aggregators have left many cab drivers cribbing about having to lead an almost hand-to-mouth existence. This is a far cry from a few years ago when the job of an Uber or Ola driver was a coveted one, with net earnings per month between Rs 50,000 to Rs 70,000 or more in some cases.

Today, not only have the cab aggregators cut down on incentives, but fuel prices have also soared, burning a hole in the pockets of cab owners and owner-drivers. Those who had bought cabs and loaned them out to other hired drivers have even bigger expenses to deal with.

Diesel prices have touched their highest ever in April 2018.
Diesel prices have touched their highest ever in April 2018.
(Photo: Mypetrolprice.com)

Diesel prices are close to Rs 65 per litre in Delhi, and over Rs 70 per litre in Mumbai. CNG is still the only viable fuel at Rs 40.60 per kg in Delhi, and Rs 44.22 per kg in Mumbai.

How Much Does A Cabbie Earn?

Monthly earnings of a cab driver.
Monthly earnings of a cab driver.
(Photo: The Quint) 

Let’s take a moment to look at how much an average cab driver earns in New Delhi. For purposes of this calculation, we have looked at cabs running about 200 kilometres per day. Fare per km is Rs 10.50 (Uber’s premier fare in New Delhi). Every trip has a basic fare of Rs 80 as well.

Without incentives and after paying the cab aggregator’s fee (at 20 percent of the earnings), a cabbie approximately earns Rs 2,192 per day. That translates to about Rs 65,760 per month. This is his total gross earnings, without incentives.

Now let’s take a look at his expenses.

What Are A Cabbie’s Expenses?

Monthly expenses of a cab driver.
Monthly expenses of a cab driver.
(Photo: The Quint)

If you look at a cab driver buying a Hyundai Xcent or a Maruti Dzire with a loan of Rs 7 lakh on a five-year tenure, he ends up with a monthly EMI of Rs 15,000 on the car. Add to that monthly maintenance charges of about Rs 3,000 (at about 50 paisa per km), if he drives 6,000 km a month or 200 km a day.

And then comes the killer expense - fuel. Diesel is now at Rs 65 a litre, which is burning a big hole in their pockets. A cabbie who drives about 6,000 km a month ends up spending Rs 27,850 on fuel alone in a month. That’s total expenses of nearly Rs 46,000 a month.

Driving a CNG cab entails fuel expenses of about Rs 20,000 a month (at 12 kmpl per kg of CNG at Rs 40.60 per kg).

Therefore, the net take-home of a diesel-driving cabbie comes down to just under Rs 20,000 a month, while those driving CNG cabs earn about Rs 27,000 a month. That’s really not quite enough for many of them. We have not even taken into account the myriad taxes and tolls that they would have to pay.

But wait, what about incentives?

What About Incentives?

This is the catch. Uber and Ola have trimmed driver incentives considerably. At one point of time, drivers could earn incentives of over Rs 2,000 a day. This has now dropped to about Rs 3,000 to Rs 5,000 a week, if they complete a certain number of trips.

Taking a conservative estimate of Rs 3,000 a week, it would add about Rs 12,000 to the driver’s net earnings, fetching them about Rs 32,000 a month. That’s about how much a cabbie earns now.

Why are most of them upset about it? Well, when they started out with cab aggregators, the higher incentives combined with lower fuel prices fetched them net earnings in the region of Rs 50,000 to Rs 70,000 a month.

With such income, many drivers bought more cars, and hired them out to other drivers. However, the expenses have mounted and the falling income has driven many of them to the brink.

Those running CNG cabs are only slightly better off. They earn about Rs 7,000 a month more compared to their diesel-cab driving counterparts.

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