Ola, Uber & The Zero-Commission U-Turn

India’s ride-hailing sector has revved a long way since its early days when the OGs, Fiat Padminis and Hindustan Motors’ Ambassadors, guised as kali-peeli (black and yellow taxis), would ply on the roads of India’s metro cities, charging by the kilometre, moving customers from point A to point B.

Then came the era of Ola and Uber. While Ola started its journey as a cab aggregator in 2010 from Mumbai, Uber entered India only in 2013. With this, began the Grand Prix in India’s ride-hailing market.

With a trunk full of discounts for customers and commissions for drivers, exceeding an engineer’s paycheque in many cases, the two cab aggregators went full throttle, burning cash as if there was no tomorrow, to capture a significant chunk of users and drivers on their platforms. 

Result? A duopoly of ride-aggregating behemoths that just cannot be ignored.

It was now time for the duo of Ola and Uber to reap what they had sown. As a logical next step, they tightened the discount stream and started squeezing drivers, making them cough up nearly 35% commissions in some cases. 

Well, why not? It was now time for the juggernauts to eat. And, they ate and ate, unconcerned who leaves or stays, as they had already baptised a section of customers divorced to the thought of owning a vehicle. 

The country’s ride-hailing space is standing at yet another hairpin turn. 

This time, the hype is all about zero commission, a model that Rapido introduced in 2023. And, let’s not forget Namma Yatri, a direct-to-driver app with no middlemen or commissions.

A Quick Detour: Under the zero-commission model, ride-hailing platforms let drivers keep 100% of their fare for a small daily or monthly fee. 

Moving on, Uber rolled out a SaaS-based zero-commission model for auto drivers across India in February. Ola followed suit, introducing a similar zero-commission structure for a monthly subscription.

However, industry stakeholders and analysts believe that for players like Ola and Uber, this is less about empowering drivers and more about remaining relevant in a competitive landscape where the driver interest is steering towards zero-commission models.

Zero-Commission Model: Gamechanger Or Eyewash?

Historically, Ola and Uber have taken a 20–30% cut from every ride, a model that’s long angered drivers, who say they’re left with scraps after expenses.

Commissions on surge pricing further dent their earnings. For example, there have been instances when they received a fraction of the surge premium, with platforms taking an unfair proportion.

Under the new model, drivers pay a flat subscription. Ola, for example, now offers a daily subscription plan of around INR 67, allowing drivers to retain their full earnings for that day.

Rapido pioneered this model in 2023, starting with cabs, and later expanding it to autorickshaws. Depending on the city, auto drivers pay a daily fee of INR 5–29 or a flat INR 500 monthly fee if their income exceeds INR 10,000.

Once hesitant, Uber now offers daily membership rates for drivers in select cities.

What’s appealing in this model is the factor of cost predictability. As the subscription model allows transparent upfront deductions, it makes a huge difference for high-frequency drivers shunting around high-demand cities. 

However, the model also shifts risk from the platforms to the drivers, an analyst warned. On slow days or in low-demand areas, the flat fee could be a drag for drivers. Platforms, however, get paid, regardless of how many rides are completed. 

There is another concern. The national general secretary of the Indian Federation of App-Based Transport Workers, Shaik Salauddin, highlights that the subscription model in ride-hailing is just a rebranded commission structure. 

“What drivers want is predictable, low, and transparent commissions, not pricing models they can’t fully trust. The platforms just want to retain the dissatisfied drivers,” said Salauddin.

Zero Commission: But, Why Now?

The launch of zero-commission models by India’s ride-hailing giants is the aftermath of years of friction and frequent clashes between platforms and drivers over high commissions.

Earlier this year (in February), auto and cab drivers in Chennai staged a protest against Ola and Uber for eating a significant chunk of their fares in the name of commission. 

Last year, Hyderabad-based cab drivers launched a ‘No AC’ protest, demanding fairer fares from Ola, Uber, and Rapido to offset rising fuel and maintenance costs. 

These aren’t isolated incidents. Similar protests have erupted time and again in major cities like Delhi NCR and Bengaluru over the past few years.

Even as Ola and Uber publicly claim that they charge a commission of around 10%, drivers say real deductions are steeper. 

“For an INR 200 ride, I end up getting only INR 110,” said Manikanta Gowda, a Bengaluru-based cab driver. Gowda added that after accounting for platform fees, penalties, and additional charges, the effective outgo shoots up to nearly 40%.

With mounting driver dissatisfaction, Namma Yatri tiptoed to provide some relief to drivers.

Launched on November 1, 2022, Namma Yatri was developed in collaboration with auto unions to free auto drivers from the cobweb of heavy commissions. Built as an open, community-driven platform supported by the government’s ONDC network, Namma Yatri challenged the status quo with its subscription-based, zero-commission approach. 

In April 2024, it launched a lifetime zero-commission plan for cab drivers in Bengaluru, offering free platform access until October 2024, followed by a flat INR 90 daily subscription fee, regardless of the number of rides completed.

According to industry observers, though Namma Yatri’s market share is still much smaller than its national rivals, the platform has shifted the momentum of the industry. 

“It proved that a zero-commission model is not just possible but scalable, forcing larger incumbents to realign. Drivers increasingly see these models as better, more transparent alternatives, pushing the giants to adapt,” Madhan Balsubramanian, the cofounder of an ONDC-based ride-hailing app, said.

Adding another layer of competition, the Indian government is also preparing to launch a cooperative-based taxi service, Sahkar Taxi. 

Unlike aggregator-led platforms, Sahkar Taxi promises to direct all profits to drivers, covering two-wheeler taxis, auto rickshaws, and four-wheelers. The introduction of this model could further disrupt the already crowded mobility landscape.

The pressure is now immense, and sandwiched between local platforms like Namma Yatri, the rapid rise of Rapido, and government-backed alternatives like Sahkar Taxi, Ola and Uber are being forced to fundamentally rethink their hefty charges.

Is The Zero-Commission Model Sustainable?

The adoption of the zero-commission, subscription-based model by India’s leading ride-hailing companies isn’t just an option anymore. It is a move to ensure one’s survival in a hyper-competitive, low-margin market. 

However, the bigger question at play is — can this model prove to be sustainable for platforms like Ola, Uber and Rapido in the long run?

No, at least what industry watchers anticipate. This model also does not support expensive customer acquisition practices, such as heavy discounts or mass advertising.

“Once one or two players give up, the remaining will likely find a way to bring commissions back,” an executive at one of the top three ride-hailing companies said.

He noted that in a traditional commission-based model, platforms benefit directly from increased ride volumes and higher fares—the more the drivers earn, the more the platform earns. 

This volume-linked upside is missing in the SaaS model. 

“With a flat fee, the platform loses the incentive to boost ride volumes or pricing. It essentially decouples their revenue from market demand. That limits the long-term scalability unless they find other ways to monetise their ecosystem,” a mobility analyst said.

The scalability question is important to highlight because all these players are operating at a loss.

For context: India remains one of the few geographies where Uber has not achieved profitability. Globally, Uber has found operational leverage, but India’s aggressive pricing, discount-driven customer base, and volatile driver relationships have kept margins wafer-thin. 

Uber India reported a consolidated net loss of INR 89 Cr in FY24 against a revenue of INR 3,762 Cr. Its total expenses for the fiscal year stood at INR 3,977 Cr, up 26% YoY.

Its competitor Ola is sailing on the same boat. Ola’s parent, ANI Technologies, reported a net loss of INR 328.5 Cr in FY24.  

Similarly, Rapido, too, is rolling in losses. It posted a net loss of INR 371 Cr in FY24. However, Rapido has enough headroom to spend freely on driver incentives and brand campaigns, given that it raised a sizeable round last year.

“Rapido is playing a long game here. Their focus is on pushing Uber to the second spot, consolidating driver loyalty, and driving volumes through subscription while continuing to charge commissions on their more profitable bike-taxi segment,” Balsubramanian said.

What’s The Future Of Zero Commissions?

The zero-commission model is not the future of India’s ride-hailing sector. It could be part of a transition strategy, but not the end game, say industry observers.

In the end, the players who stay the course will be the ones able to build real value for drivers. Besides, some experts believe that finding a scalable non-ride monetisation route may define the next era of ride-hailing in India.

This new route of monetisation could be ancillary services for drivers, such as vehicle servicing, discounted auto parts, and financial products like loans or insurance. 

The real stickiness would eventually come from solving off-platform problems for drivers. But, even that’s not going to be a straight road. For the platforms to successfully expand into adjacent services, they would need to build operational muscle, which is currently missing. 

This makes us wonder — who’s gonna run out of road in India’s ride-hailing Grand Prix?

[Edited by Shishir Parasher]