For cab drivers’ associations who’ve been campaigning for higher wages for gig staff, the provisioning of 80% of the experience fare for the cab driver isn’t passable
Conversations from trade consultants highlighted how the adoption of those tips may make the enterprise for cab aggregators financially unviable
Rameesh Kailasam, CEO of IndiaTech, informed Inc42 that by making well being and time period insurance coverage for cab drivers, the brand new tips create an overlap with the Code on Social Safety, 2020
With the Covid-19 pandemic having put a extreme pressure on India’s gig economic system, the federal government has launched coverage measures to handle the wants of non permanent staff engaged as service suppliers with numerous corporations.
Nevertheless, staff’ associations have typically flagged the inadequacies of those coverage strikes by the federal government.
On November 27, the street transport ministry issued Motor Automobile Aggregator Tips – 2020, to supply a framework to the state governments and union territories for the issuance of licenses in addition to regulating the enterprise carried out by such aggregators, together with Ola and Uber.
Among the salient factors within the tips embody limiting the working hours for drivers connected with cab aggregators to 12 hours a day; medical health insurance for every driver built-in with a cab aggregator value at the very least INR 5 Lakhs with the bottom 12 months 2020-21, to be elevated by 5% annually; time period insurance coverage for every driver for an quantity not lower than INR 10 Lakhs with 2020-21 as the bottom 12 months, to be elevated by 5% annually; and, drivers to obtain at the very least 80% of the whole fare for every experience.
For cab drivers’ associations who’ve been campaigning this 12 months for higher wages, the provisioning of 80% of the experience fare for the cab driver isn’t passable.
Shaik Salauddin, the national-general secretary of the Indian Federation of App-Primarily based Transport Employees (IFAT), informed Inc42 that by setting apart at the very least 80% of the experience fare for drivers, the brand new tips have labored in favour of cab aggregators, who’ve anyhow been levying a 20% fee for every experience from cab drivers. A driver working with Ola confirmed Salauddin’s declare.
“We have been asking the government to curb the commission charged by cab aggregators at 5-10% of the ride fare. It was one of our demands for our protests back in August. It is disheartening that the government has taken no notice of these demands,” mentioned Salauddin.
However, trade consultants highlighted how the adoption of those tips may make the enterprise for cab aggregators financially unviable.
‘Guidelines Will Impose Cost Burden On Aggregators’
Rameesh Kailasam, CEO of IndiaTech, an affiliation representing Indian client Web corporations and their buyers, informed Inc42 that by making provisions for well being and time period insurance coverage for cab drivers, the brand new tips create an overlap with the Code on Social Safety, 2020, handed by Parliament in September this 12 months.
“The Code on Social Security, 2020, already mandates firms employing gig workers to make 1-2% of their annual turnover available for ensuring social security of their workers. As such, the guidelines asking cab aggregators to provide health and term insurance for their drivers would create duplication of costs,” he mentioned.
Within the Motor Automobiles (Modification) Act, 2019, the federal government had mandated that an aggregator will have to be issued a license by the respective state authorities, and the states will comply with tips issued by the Centre.
Accordingly, the not too long ago issued tips have laid down numerous procedures and circumstances for grant of license to an aggregator, compliance with regard to automobiles, regulation of fares, amongst different issues.
Kailasam mentioned that the brand new tips may create a price burden on cab aggregators.
“The guidelines, while restricting aggregator earnings to 20% of the fare for each ride, have further subjected them to multiple compliances that have a significant cost bearing. These include concepts of state-wise security deposits, license fees, driving test facilities, driver training, health, and term insurance, data sharing on behalf of drivers with a ministry, etc. all of which can significantly hurt the growth of existing business and may create entry barriers for future startups in this space,” he mentioned.
On the optimistic aspect, Kailasam identified that the brand new tips recognise all motor automobiles, together with e-rickshaws for aggregation. This may very well be a significant enhance for startups working as aggregators for e-rickshaws, bike taxis and different motor automobiles for the aim of transportation.
The brand new tips additionally point out that feminine passengers, looking for to avail experience pooling, ought to be supplied with the choice to pool solely with different feminine passengers. It’s value noting that experience pooling startups similar to Fast Journey already supply this feature to their prospects, thus suggesting that it’s a function that may be constructed into the backend of common cab aggregators similar to Ola and Uber too.
The rules additionally embody factors associated to pricing of cabs throughout a surge in demand, the bottom fare for every experience, organising of name centres with 24×7 operations to handle buyer complaints, amongst different issues. An entire overview of the rules will be discovered right here.
