Uber has announced a significant shift in its approach to auto-rickshaw services in India, moving away from its commission-based model in favour of a daily subscription fee for drivers. This change comes as the company faces increasing competition from local ride-hailing rivals, including Rapido and Namma Yatri, which have been attracting drivers with their commission-free, subscription-based models.
This new business strategy is part of Uber’s broader efforts to improve profitability in India, one of its largest and most competitive markets. Uber originally launched its auto-rickshaw service in India in 2015, but after an initial suspension, it reintroduced the service in 2018. The latest model update follows a quiet pilot phase and will be implemented for all auto-rickshaw drivers using the platform.
Under the new structure, auto-rickshaw drivers will be required to pay a daily fee ranging from $0.23 to $0.46 (20-40 INR), depending on their city. This eliminates Uber’s traditional commission charges, which typically range from 25% to 40% of each ride fare. Instead of Uber handling payments and setting fares, drivers will now directly collect payment from riders—either in cash or via the Indian government’s Unified Payments Interface (UPI). As a result, Uber will no longer apply credits, promotions, or cancellation fees for auto trips.
Uber’s decision to adopt a subscription model reflects the growing preference for such approaches in India’s competitive auto-rickshaw market. Local competitors Rapido and Namma Yatri have already successfully used subscription-based models, which forgo commission fees entirely.
While Uber has taken a step back from controlling fares, it will continue to suggest an estimated fare for the trip. However, drivers will have the flexibility to set their own rates, potentially leading to bargaining between drivers and riders. Uber also clarified that it would not mediate fare disputes, further emphasizing the shift towards a more decentralized approach.
Despite these changes for auto-rickshaw services, Uber will continue to operate its traditional commission-based model for four-wheeled vehicles in India. The company has also been exploring other models in the country, including flexible pricing and concurrent ride options, to stay competitive against the likes of SoftBank-backed Ola, Rapido, and Namma Yatri, as well as independent drivers.
The new auto-rickshaw payment structure aligns with Uber’s goal of offering greater flexibility to independent contractors while navigating the tough competition in India. However, it is unlikely that this model will be rolled out in other markets, such as the U.S., where Uber’s core ride-hailing service remains largely commission-based.
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