Ride-hailing giant Uber has announced a significant change in its operational model for auto drivers in India, shifting from a commission-based system to a Software-as-a-Service (SaaS) subscription model. As part of this transition, all auto rides booked via the Uber app will now be cash-only, effective from 18 February.
A notification on the Uber app has informed users of the change, highlighting that the decision is aimed at staying competitive within the industry. “Given the industry’s shift towards a subscription-based model for drivers, we have decided to align our approach accordingly so as not to be at a competitive disadvantage,” an Uber spokesperson stated.
Ride-hailing platforms such as Rapido and others have already implemented similar subscription-based services for auto drivers. Under this model, drivers pay a fixed fee for access to the platform rather than a commission per trip.
In a blog post detailing the shift, Uber clarified that its role is limited to connecting passengers with drivers, with the service itself operating independently of the company. “Uber is making a major shift with its new Auto model, moving towards a SaaS (Software-as-a-Service) approach. Here’s what’s different… Uber will connect you with nearby drivers, but the service itself is independent of Uber,” the company stated.
The company further emphasised that it will not impose any trip-level commission on drivers. Additionally, Uber will no longer levy cancellation charges on riders. While Uber will suggest a fare for trips, the final amount will ultimately be decided by the driver and the passenger.
The transition marks a significant departure from Uber’s traditional commission-based structure and reflects a broader trend in the ride-hailing sector, where companies are exploring alternative revenue models. The move is expected to impact both drivers and riders, with flexibility in fare negotiation and a shift in Uber’s direct involvement in transactions.
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