The argument can be that they’re technically taking home 40% if you take their debt payments that’s paying for an asset.
But a car is a depreciating asset, so after 5 years they’ll technically have lost 50% of that money.
The 10% decrease in fees would go a long way for these drivers. I’ve spoken to a lot of them and it’s really sad what’s happened.
You may ask why did they join in the first place ? They were attracted to these services by glamorous stories of cab drivers making 1500-2000$ a month on these apps. But all fo that income was funded by inorganic incentives that never fit into the unit economics. It was basically VC funding that was channelled into a few drivers income, which then brought in a lot more.
I feel strongly about this as I’ve spoken to multiple drivers who make very little money and work about 12-14 hours a day. You can see a lot of them just sleep in the car in the night to make sure they can make ends meet.
On the other side, they’ve stopped heavily discounting the rides at the consumers end, which means demand has decreased because they had artificially inflated demand by providing a service at discounted prices.
So that means drivers don’t get as many rides either.
It’s basically a double whammy for the driver.
Aggregators charging 20% of the ride costs is just unempathetic and stupid if they actually did the math.
But obviously they’ll have to recoup all the VC money they’ve invested. It baffled me for a long that the unit economic never made sense for the longest time.
They took no fees, they gave discounts and they attracted drivers by inspiring them of glamourous stories where cab drivers were making more than most employees in India.
Most cab drivers who saw this as a gold rush, took on a lot of debt to buy a car and drive people around. With time they’ve realised it’s all a sham but there’s nothing they can do about it. They’ve already committed to the debt, and if they stopped paying it, they’ll loose the car, which is all they have as assets.