• Uber introduces a daily fee system replacing commissions for auto-rickshaw drivers in India.
  • Riders will pay drivers directly through cash or UPI, with flexible pricing.
  • The change follows similar models implemented in Bangladesh and Southeast Asia.

Uber has announced a major shift in its business model for auto-rickshaw services in India, replacing its traditional commission-based structure with a fixed daily fee system.

The move comes as the ride-hailing giant faces increasing competition from local rivals like Rapido and Namma Yatri in one of its key markets.

Under the new model, auto-rickshaw drivers will pay a daily fee ranging from 20 to 40 Indian rupees ($0.23-$0.46) to access Uber's platform, eliminating the previous commission charges that ranged between 25% and 40% per ride.

The change affects all auto-rickshaw drivers across India, following a successful pilot program.

The restructuring introduces several significant changes to the service. Riders will now pay drivers directly through cash or UPI (Unified Payments Interface), and Uber will no longer display final fare amounts, instead offering suggested prices that drivers can adjust.

The company has also eliminated cancellation charges and the use of Uber credits for auto-rickshaw rides.

"We're not involved in fare-related disputes between riders and drivers," Uber stated on its FAQ page, indicating a more hands-off approach to pricing negotiations.

However, the company will continue to maintain its safety reporting features through the app.

This strategic shift isn't unique to India; Uber has implemented similar subscription-based models for bike and auto-rickshaw services in Bangladesh and select Southeast Asian markets.

The change reflects the company's adaptation to local market conditions, particularly in regions where auto-rickshaws constitute up to 25% of all motorized trips.

While the new model is currently limited to auto-rickshaws, with four-wheeler cabs continuing under the traditional commission structure, it represents Uber's ongoing efforts to remain competitive in the world's most populous market.

Edited By Annette George