Archive — US — techcrunch
Uber ditches commissions in favor of daily fees for rickshaw drivers in India
Uber is shifting from a commission-based model to a daily fee structure for auto-rickshaw drivers in India, responding to competition from local services. This change, affecting all drivers in the country, aims to improve margins and aligns with similar models employed by rivals.
Key points
- Uber is implementing a daily fee model due to competition from local rivals like Rapido and Namma Yatri.
- The fee for drivers ranges from $0.23-$0.46 per day, depending on the city.
- Previously, Uber charged commissions of 25%-40% per ride, but this model has been replaced.
- Drivers will now set their own rates, leading to potential fare negotiations.
- Uber’s model shift reflects broader competition efforts and ongoing experimentation with pricing structures.
Why it matters
- Uber's move resonates with 2025 IT trends emphasizing subscription and flat-rate service models.
- Similar shifts have been noted in other regions, such as Bangladesh and Southeast Asia, where Uber tested similar models.
- The auto-rickshaw sector plays a significant role in India's transportation, comprising 25% of all motorized journeys.
This strategic shift by Uber aims to enhance competitiveness in India, indicating a broader trend towards more flexible business models in response to localized competition and consumer behavior.