Sharp increase in commute leads to severe shortage of taxis and drivers

While commercial vehicle registrations have gone down drastically — by 42% in the two years to 2022 — the demand for drivers has increased sharply.

Apart from cab aggregators such as Uber and Ola, who are looking at regaining lost market share, and ecommerce firms that continue to hire drivers in large numbers, there is demand for drivers in the used-car sales market as well, fuelled by startups like Spinny, Cars24 and Droom which provide vehicle pickup and drop-off services.

“The logistics and mobility sector as a whole, which consists of cab drivers as a significant share, has the second highest demand from enterprises after the ecommerce segment,” said Nilabh Kapoor, chief business officer (workforce fulfilment & staffing) at blue-collar workforce management platform BetterPlace. This sector accounted for 26% of the total demand for jobs in fiscal 2022, he said.

With authorities putting in place severe restrictions on travel during the Covid period, demand for taxis and drivers had gone down by a fourth compared with the pre-pandemic time. This had led to taxi providers and aggregators cutting down operations and many drivers shifting to other jobs. Sales of passenger vehicles utilised for commercial purposes dwindled to a couple of thousand units during the pandemic from their peak of about 300,000 in 2016. Nearly a third of the demand in 2016 had come from cab aggregators such as Ola and Uber. That share had fallen to a low single digit.

With offices, educational institutions and travel now back in full swing, cab aggregators are now witnessing a sharp uptick in demand. According to Uber, demand for cars on the ride-hailing platform has surpassed pre-Covid levels.

There is a material increase in demand for cabs as well as for more drivers on the platform, said a Uber spokesperson.

Given the demand, drivers are getting above-average salary compared with other similar profiles, said Kapoor. On an average, they got Rs 26,484 a month in the last financial year.

Uber has increased fares to help its driver-partners amid the rising fuel prices, the spokesperson said, adding that it would directly boost driver earnings.

Rival Ola did not respond to queries till press time Wednesday.

User penetration of shared mobility services is expected to rise to 79.6% in the next five years from 65.2% in 2022, show data available with staffing company

. The southern markets, which now account for the highest revenue in the segment, will be challenged by the eastern markets which will be fastest growing, it said. Shared and micro-mobility services will also see a steep rise in recruitments, said Munira Loliwala, business head, TeamLease Digital.

Apart from driver-partners, Loliwala said the mobility sector would create opportunities for young students looking at working on newer technologies in the automotive space.