comscore Uber changes business model in Delhi while it awaits Radio Taxi license

Uber changes business model in Delhi while it awaits Radio Taxi license


After resuming operations in Delhi, the cab aggregator has decided to not take commission from its drivers till it gets its radio taxi operating license from the authorities. Uber was forced to apply for a new license under the Radio Taxi Act in order to get back into the city. Also Read - Uber cab service resumed in 31 cities in India with new Lockdown 4.0 guidelines

Also Read - Uber launches 'Uber Connect' package delivery service to rival Dunzo and Swiggy Genie

The Economic Times is reporting that this move comes after the Delhi Police police stormed into Uber’s offices, confiscating laptops, demanding why they were still operating even without a license. “We want to be respectful of the government and regulations. We have chosen to go beyond what is expected of us and introduced a new business model to become commission free in Delhi,” Gagan Bhatia, general manager at Uber Delhi told the publication. Also Read - Uber to operate 'Essential' cab service to hospitals and pharmacy stores in 4 cities

Uber charges 20 percent commission from all its 4000 drivers that run in the capital. Till the company does not receive a license, the drivers can remit the full amount, instead of the 80 percent that is traditionally given to them. This inevitably could mean, a reduction in Uber ride charges.

“This does impact business, but we are waiting for the license to come in and only once the government says we are compliant, will we go back to charging a commission,” Bhatia said.

Uber announced its return in Delhi last week, and the license is anticipated to be issued after the state elections on February 7. After the raid, Uber decided to take the no commission route like the Pooch-O app, which offers aggregation to auto rickshaw drivers in the city. Pooch-O does not collect payments, while Uber collects the payment and then remits the 80 percent back to the drivers. Just like Pooch-O, Uber will not collect commission temporarily, but will still collect payments, and then remit the full amount to the driver.

Uber was banned last month after the rape incident in Delhi. The victim has decided to sue the US-based company for negligence, and is looking for compensation for the same. Her lawyer is examining the possibility of asking a US court to exercise jurisdiction in the case. He said there was a substantial body of case law to suggest the court would consider doing so.

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  • Published Date: January 28, 2015 5:53 PM IST

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