The flood of new drivers willing to sign up with Ola and Uber has slowed to a steady trickle. As the companies have reduced the incentives and bonuses they used to offer to their drivers, the number of new joiners has steadily taken a plunge while many old ones who have been disillusioned, are also leaving the platform.
The news comes from ET, which cites analysts and company sources. Apparently, more than 10,000 drivers have left Ola and Uber in Bengaluru alone in the past two years. The number of new drivers joining the platform has fallen as well and merely 40-50 new signups are taking place every day, as compared to over 300 in major Indian cities like Delhi and Bengaluru.
However, analysts also say that this could be signs of a maturing market. And of course, the drop in incentives also has a significant role to play.
While the supply (of drivers and vehicles) has dropped from 2016 to 2017, it is stabilising and the market is slowly showing signs of maturing. Newer drivers coming on board are aware that the incentives and salaries offered are lower than what they were last year. They are more prepared to work longer hours for lower wages in the pursuit of owning a car in the long run.
Indeed, I remember the very beginnings when a driver made almost as much from the company in bonuses, as he did from his customers. However, that was a short lived method of getting more driver sign ups and now that there is plenty of supply, these companies are diverting their funds to driving demand.
To give some perspective, Ola has over 550,000 drivers using its platform in over 100 cities. Uber on the other hand, has a more dense distribution with 400,000 drivers spread across 29 cities. However, both the companies have been affected by this slow down of new driver sign ups even as customer interest has surged up sharply.
However, company executives are not particularly worried with this development and they believe, that the allure of owning a car will offset any major disturbances and, a significant number of younger drivers will continue to stick around. An anonymous source told ET:
Now the market is maturing. The drivers who are likely to stick are often younger drivers who were working at even more unsatisfying jobs and are willing to put in the additional amount of time so they can be independent car owners after working four-five years with Ola, Uber or both.
