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Aggregators, Driver-partners and the State

Administrative and Legal Conundrum

Chhavi Sharma (sharmamnkschhavi@gmail.com) teaches at the Department of Arts, Manipal University, Jaipur and is completing her doctorate from the Department of Humanities and Social Sciences, IIT Bombay.

 

Based on the interviews of metered taximen and aggregator drivers, news reports, and a review of aggregators’ operations in different countries, the many violations by the aggregator companies are brought forth. By reviewing the ground realities with regard to the companies’ blogs, their promises, and six different policy drafts aimed at regulating Uber and Ola, the need to see beyond and question the discourse of scientific rationality that frames their operations is highlighted.

 

Mumbai in October 2018 witnessed more than 10 days of strike by the drivers of cab aggregators Uber and Ola, demanding a raise in base fares, fares in accordance with the car-type and fuel price hikes, accountability of companies while delisting them, and greater security. It was called off temporarily. However, by 17 November 2018 drivers were again planning a strike.

Ola was launched in Mumbai in 2013 and Uber followed in 2014 and soon became a preferred alternative to the state-regulated metered or kaali-peeli taxis. Uber claims, “Uber has been there for one and all … Uber is changing the way this city moves.” Ola has “a car for every occasion,” “cabs for every pocket.” They disrupted the monopoly of the existing kaali-peeli drivers. Aggregators posit themselves as a disruption that the city and its global elite deserve by easing out long commutes characteristic to the city, by bringing certainty and security to rides driven on the plank of constant surveillance through global positioning system (GPS) navigations. Algorithm-driven fare calculation makes the process dynamic, market-driven and promoted as precise, rational and scientific. Further, aggregators claim they are making drivers “entrepreneurs.” Uber calls them “driver-partners,” while Ola refers to them “micro-entrepreneurs.”

This paper, based on the interviews of metered taximen and aggregator drivers, news reports and a review of aggregators’ operations in different countries, brings forth the many violations brazenly made by the aggregator companies and morphed under the aggressive marketing of progressive “disruption.” By reviewing the ground realities with regard to the companies’ blogs, their promises and six different policy drafts aimed at regulating Uber and Ola, the article urges the reader, the public to see beyond, question the discourse of scientific rationality that frames their operations. The article attempts to make visible their strategy of ad hocism in the name of flexibility which has more to it than mere scientific rationality, unbiased decision-making and precision that is being valorised. It questions why the companies dropped the term “cabs” from their names. Is this done to prevent legal, financial and regulatory sanctions? How does shifting status/categorisation benefit them? How are the terms “partner” and “entrepreneurs” made operational in their everyday operations? This article is an attempt to urge the state and the public to look beyond what is shown to them, what is made available to them, many a times clothed in jargons of technology, algorithmic operations, entrepreneurship and thereby transparency of operations and their benevolence. Through a review of their few years of operations and violations in Mumbai city this paper emphasises the need for the state to be critical of the normalisation and valorisation of these companies on the plank of a technologically driven discourse in order to retain the idea of “public” in “public service” and public infrastructure of the city in order to keep Mumbai an inclusive city while on its onward march to becoming a “global city.”

Experience from Other Countries

Uber was launched in the United States (US) in 2009 and soon spread to many cities across the globe. In many parts of the world, it has also been embroiled in law suits (Austin, London), had been asked to leave (Austin), and continues to be at the centre of debate on regulating them. Uber and Ola Cabs are part of what is called the sharing economy, gig economy and platform economy. Schor (2014: 1) has noted that it is good to be under “the big tent of the sharing economy because of the positive symbolic meaning of sharing,” though it is “based on evading regulations and breaking the law” (2014: 8). Scholars feel that there is no conclusive definition defining platform economy because of the pace and variety of change in it (Lenaerts et al 2017). Definitional lack is also a regulatory challenge and as Lobel (2016: 91) notes, it is “not only a paradigmatic shift for business, but also for legal theory.”

Applying existing regulations is fraught with inconsistencies, an experience not restricted to India alone, and thus the need to define them, to categorise them and then regulate them. Lenaerts et al (2017) also make note of such difficulties in their study of seven European Union (EU) countries. In addition to this, keeping a changing, fluid identity benefits companies in evading laws. Mathew (2016) also noted this “re-crafting” as to how Uber and Ola Cabs now call themselves transportation network companies (TNCs). Gillespie says, “Uber uses its identity as both a platform and a technology company to define its role” (cited in Rosenblat and Stark 2016: 3761). Rosenblat and Stark (2016: 3761) note from Lobel and Lowrey how as “neutral intermediaries [they] facilitate access to underused and undercommitted goods and services.” In Mumbai they propose to be solving issues of urban traffic, congestion while also empowering people with bringing entrepreneurship to drivers for the first time by making them “driver-partners,” mini-entrepreneurs. This is an incorrect claim, first, in the context of Mumbai which for many decades has had owner taximen. Second, it hides the fact that there are multiple arrangements of lease and employment under which drivers associate with these platforms. Third, it is indifferent to the reality of aggregator drivers driving on monthly salary as employees for respective owners of vehicles and not as entrepreneurs.

In addition to these, Rosenblat and Stark (2016: 3763), too, in a different context from the US quote a respondent “Entrepreneurship is a bit of stretch.” Information asymmetries and “algorithmic management” (Rosenblat and Stark 2016; Shapiro 2017; Wood et al 2018) have been argued by writers to be conditioning driver’s freedom and autonomy in terms of ratings, prices, driver’s incentives, commissions cut, and in adjudication matters in cities of the US and EU. Simultaneously, their technology also enables constant surveillance over driver-partners. “Soft control” (Rosenblat and Stark 2016) is practised through a constant watch over driver’s routes and activity and drivers are pushed to reconsider their decisions. How are drivers micro-entrepreneurs when all decisions like fares, incentives, routes and commissions are made by the companies?

Wood et al’s (2018) report from seven EU countries reveals that algorithmic control can lead to low pays, exhaustion and increased precarity along with flexibility. This resonates with Rosenblat and Stark’s (2016) argument that technology-driven informational asymmetries and algorithmic management enable structure of control over workers, which I argue is highly skewed in favour of the platform companies vis-á-vis the drivers, the public and the government.

It is imperative for the governments to look beyond the strategically created rhetoric in order to define, categorise and regulate them and at the same time not be “reactive enforcers” (Lobel 2016: 163) merely “dealing with side effects” (Groen cited in Lenaerts et al 2017). The need for government in Mumbai and the world over to collect, collate, research and analyse data is felt more than ever before and it is only with equally sound, updated information resources that policy framing can be sound, and relevant. Ill-informed policy will only bolster the platform companies’ view of the law being regressive. Uber’s founder, Travis Kalanick during his visit to India in 2016 said, “his firm was okay with rules as long as they are bending towards people and products. But sometimes those rules are about protecting the old ways of doing things, and that slows the future down.”

It is imperative to end the legal vacuum in which much like Sassen’s regulatory fractures1 aggregators do not conform to existing laws, and rather violate some of the linked regulatory laws and procedures. Overcoming legal vacuum would involve defining, recognising and regulating them and thereby bringing an element of certainty in a highly unsettled dynamics skewed in favour of the platform companies.

Violations

Taxis that run on Ola and Uber, as is the case the world over, are not owned by them. In Mumbai, Ola and Uber taxis are All India Tourist Permit (AITP) taxis. AITPs were conceptualised for facilitating inter-city transport and thus have a different regulatory logic due to which there is no upper limit on their numbers, no specification on their fuel as against the specification of clean fuel and numerical strength for kaali-peelis. The primary violation of inducting AITP taxis for local commute triggers other significant violations. Their numbers are not capped, therefore a city can gradually, in fact, is already facing an unbridled growth of Uber/Ola taxis which can then trigger massive traffic snarls, increase congestion and pollution in the city and reduce profits that the driver can make. Ola has “9,00,000 vehicles and 10,00,000 empowered entrepreneurs as “driver-partners” in India. Newspaper reports in November 2018 state that the number of Uber and Ola Cabs collectively stands at 70,000 in the Mumbai Metropolitan Region. This staggering increase in diesel- or petrol-powered cabs in just four years is an absolute violation of the rule dating back to 2002 that mandates local public commute vehicles to be CNG-run to keep pollution levels in check. They unabashedly challenge urban regulatory authorities.

Dynamic pricing: Uber and Ola Cabs run on dynamic/surge pricing, wherein algorithms set the price depending on numerous factors like time of the day, areas in the city (central business districts, shopping malls, tourist spots) and the corresponding demand for cabs. Theoretically, greater the demand, greater is the push for drivers to move in surge areas to meet increased demand and good incomes. People who agree to pay the surge/increased price get the ride and the others wait or take other modes of commute. A public service like a taxi in Mumbai is turned into a commodity in no time. Dynamic pricing, the backbone of these innovative platforms posited as an unbiased, neutral and rational way of calculating fares departs paradigmatically away from the public service principle that has been fixing fares for taxi trade for over a century.

Their “subsidy-incentive” model, Srineck (2017: 26) notes, is a clear case of the “network effect … having a natural tendency towards monopolisation” and has been instrumental in their rapid penetration in Mumbai. In their initial years of operations in the city, there were varied yet higher monetary incentives (per trip) for drivers and subsidies (discounts) for passengers.

If I complete 3 rides, I get₹ 2,200, five rides—₹ 3,000, seven rides—₹ 3,300, nine rides—₹ 4,000, 11 rides—₹ 5,300, 13 rides—₹ 6,500 as incentive. This gets directly deposited in my bank account, is excellent for side business. My brother also drives this car in the other shift and together we are able to save upto₹ 50,000 per month. It has been good till now. Incentive plan varies, it is not the same for all, incentive depends on the vehicle, how old is the driver with Uber, his track record: rating, number of trips done, any complaints against him. When we join Uber, drivers are given a basic plan, it increases from there. (interview with Uber driver 2016)

This ensured increasing drivers and passengers, thereby deeper penetration: spatial and numerical in the city and in everyday practice and perception of the city’s public. Once adequate penetration was achieved, incentives consistently reduced, so did the discounts for the passengers. Now,

If I complete 27 trips in three days then I get₹ 1,000 extra, as a bonus, and for 36 trips in four days I can be paid₹ 1,500. Now we don’t get payment like it was in the beginning, incomes have dipped. Each one of us has a different incentive pattern. I won’t know other driver’s incentive. It varies from driver to driver.

This incentive model soon turned into a commission charging model by 2017, taking as high a cut as 30% from the driver’s earnings. This is reminiscent of how private fleet companies had followed a similar path of expansion and to displace kaali- peelis in Mumbai only to see stagnation within a decade.

Their model of payments clothed in rationality, scientificity not only morphs ad hocism, profit-oriented self-interest, casualisation and de-professionalisation, but has begun the conversion of public services into “commodities” in tacit, unsaid yet strategic ways.

Myth of ‘putting control in the hands of the rider’: Ola and Uber claim, based on their information technology enabled and GPS navigation powered apps that the rider is the master of his ride. Algorithms show accurate fare approximations and then the final fare is considered to be precise. However, resolution in cases of incorrect fare2 is ambiguous as the apps are expected to be unerring. Algorithms are abstract, thought to be scientific, rational and unbiased and therefore the state has seen no need for their regulation, thus making them ungovernable. Algorithms, unlike their transparency claim, are highly opaque.

Even in cases of harassment and rapes, companies have been found wanting,3 distance themselves, and follow a strategy of “risk transference” (Malin and Chandler 2016; Schor 2014), transferring risks and cost of risk on to their passengers. Malin and Chandler (2016) found cases where risks were transferred onto the companies’ workers and their families. However, in the case of Mumbai and in the Indian market we can see it extend onto passengers as well. Even a security risk is transferred onto passengers and it is made to be the passenger’s onus. A simple regulatory, law and order procedure of fixing accountability seems to have suddenly gone abstract, ambiguous, and thereby, out of control.

Their tall claims of security due to technology-enabled navigations are hollowed out given the fact that their drivers lack the public service vehicle authorisation badge granted and renewed only after checking driver’s precedents. Security concerns are compounded given that there is a lack of smooth two-way communication channels, there are no call centres where a passenger could call to register complaints, and it all happens through emails where one could continually receive software-generated responses. Communications are frequent, though largely unidirectional or rather top-down. Thus, one can say that transparency as a practice is observed by the companies at their discretion.

In the wake of glaring negligence it is important for regulatory policy to ask what Lobel (2016: 93) would call “hard cases”:

(i) How is accountability, answerability (of companies and drivers) to be defined?

(ii) Design policy that remains congruent with their perennially changing mode of operations.

(iii) How are the companies to be held accountable with respect to their driver-partners?

Linked to the “how” is also the “who,” as in who will be the designate regulating authority.

These companies till date have evaded existing regulations and have been vociferously opposed to any regulation under the pretext that it would stifle their innovative model of offering taxi service that is flexible yet scientific and rational.

Challenges before Regulatory Bodies

Formulating a regulatory policy is not a straightforward task given that companies change their categorisation from cabs to TNCs (Mathew 2016). Driver incentives and discounts for passengers change. Algorithms continuously work on changing contexts in order to keep them highly competitive.4 Uber states on its website, “Uber is not a transportation provider.” Further, there is no independent data with the government about their functioning adding to the challenge of relevant policymaking. Added to this is their strategy at perception creation supplemented with market promotions, which is at the heart of their growth story. For instance, by calling their drivers, driver- partners they claim to have created new owners, asset holders in the cities and thereby empowered drivers. This morphs the ground realities: In Mumbai the number of drivers driving someone else’s car on these platforms on a monthly salary basis are on the rise. Many drivers driving on rent after realising the potential of earnings in the initial period bought their own vehicles, leading to a massive spike in their numbers on the road. Ola Cabs and Uber websites list how someone can become a driver with them by taking the car on lease against a small down payment and everyday payment. With too many cars (70,000 in Mumbai) on the roads, drivers have noted that competition has increased, which leaves them no other option except for working longer hours. Further, this has added to the traffic congestion as noted by many of the drivers and also found in a recent newspaper report to be slowing down movement of traffic (Sen 2018).

The incentive structure has ended and the one that restarted in 2018 is meagre, difficult to achieve and varies from driver to driver as told by two drivers of platform companies in 2018. There are different cars, different categories corresponding with different fare brackets and surge pricing for them. Nothing of this is available in the public domain. Despite the opacity, the city public believes in their claims of transparency, innovation, scientifically precision, rationality and unbiasedness due to their grounding in information technology. Further, the growing number of drivers and owner-drivers with them over the years has tremendously increased their stakes in the future of companies in the city. Authorities have to be considerate towards the impact of policies on all such varied and numerous stakeholders and thus find themselves further constrained. It is imperative for the state to uncover the contradictory rhetoric of public safety vis-á-vis driver entrepreneurship, autonomy and discourse of freedom vis-á-vis constant surveillance and algorithmic control to debunk their control and influence on public opinion. This varied and multilayered reality presents a complex challenge before the state regulatory bodies in framing regulatory policies.

Both centre- and state-level authorities have been coming out with regulatory policies since 2015 to plug the legal vacuum (Home Department 2015). As one of the senior officials of regional transport office said, “the fundamental question is, are we going to recognise them, and how?” This is crucial for public, for its drivers, government, for urban planning, for the labour question and for maintaining law and order in the cities.

Plugging the Legal Vacuum

By 2015, the metered taximen of Mumbai city had started to feel the downturn in their incomes due to the predatory expansion of Uber and Ola. Taximen were building pressure on unions and the government. Since 2015, both the central and state governments have been issuing policy drafts independently to regulate the aggregator operations in the city.

The first set of regulations was at the state level, titled “City Taxi Scheme, 2015” that for the first time recognised and defined Uber/Ola as “aggregators” and mandated them to register with the licensing authority and their drivers to have the public service vehicle (PSV) badge. Once registered, they were prescribed a minimum and maximum number of cars powered only by clean fuel, which was a move to limit their numbers, thereby checking traffic and pollution of the city. The fare structure to be followed was left unclear though each taxi was mandated to fit working electronic digital fare meter in the front panel. This draft drew a lot of condemnation from the aggregators. Uber went on to publish a blog to urge support from its passengers, “A Step Backwards for Mumbai,” wherein it noted,

“if passed it would impose government controlled, artificially inflated fares designed to protect the incumbent taxi industry—compelling consumers to pay a premium for more than is necessary for access to a safe, efficient and convenient transportation option.” Uber and the on-demand platform industry have been at the forefront of modernising transportation options by introducing technological advances that are more environmentally friendly and economically sound … We urge the Government of Maharashtra to do right for Mumbai and its citizens by adopting a separate, progressive regulatory framework, designed for on-demand mobility platforms in keeping with the spirit of the Central Government Advisory. [emphasis author’s]

Mumbai, over the coming week, we need your support to raise awareness against these regulations that stand against the freedom of consumer choice, regressive regulations that would effectively take the forward-looking and technologically savvy city of Mumbai, years back.

Uber made false claims of being environment-friendly, attempted to engender public opinion of being the city’s benefactor, wherein it has fears of its operations being stopped by the state. It portrays the government’s actions as inimical to the best interest of its public. The blog indicated a gulf between the state and central governments, Uber preferring the latter as the policymaker for them.

Simultaneously, in October 2015, the union (central) Ministry of Road Transport and Highways (MORTH) issued an “Advisory for Licensing, Compliance and Liability of On-demand Information Technology based Transportation Aggregator [Taxis (4+1)].” In addition to the state government rules, this advisory requires apps to include a feature where local police could be contacted in an event of emergency, and that all data about the ride, fare, location of the vehicle and driver has to be submitted to the central and state governments unlike the present form of functioning that had no scope for this. Any kind of arbitration till date between driver or aggregator or passenger or aggregator is done by the aggregator itself which questions the ethic and unbiased nature of the very idea of independent arbitration and adjudication. In spite of state and central governments working independently on regulating aggregators the hiatus in the legal infrastructure structuring and monitoring the taxi trade as public commute continued.

A senior official in 2016 agreed that numbers of Uber and Ola Cabs have swelled in the last one and a half years and rules are to be made. October 2016 saw another set of draft rules at the state level titled, “Maharashtra City Taxi Rules, 2016” for “App based city taxi permit” (Home Department 2016). It gave a fresh definition to “aggregator.” It retained some of the regulations like that of the PSV badge, licensing, registration and clean fuel proposed in the City Taxi Scheme, 2015. Vehicles already inducted with platforms had to convert to clean fuel within a year. Aggregators had to keep cars of varying engine capacity in their fleet and these would invite different permit fees. It created a provision that kaali-peelis could be attached with these platforms and were free to disengage with them but not before one month of their working on the platforms after joining them. There was no discussion on the fare structure and calculation in this draft as well. It remained at this level, no final policy could be seen being enforced on the roads. Soon after, a committee was set up in May 2016 at the central level (MORTH 2016) whose “Report of the Committee Constituted to Propose Taxi Policy Guideline to Promote Urban Mobility” was issued in December 2016. The Khatua Committee report (2017) noted that this report was sent to secretaries of all state governments for commensurate policymaking.

Lack of Upgradation and Alternatives

The MORTH (2016: 3) concedes how the Indian taxi industry has remained devoid of any upgradation and found rules restrictive: “Taxi permit regime is onerous and limiting the growth of the taxi and shared mobility industry.” It notes how lack of good alternatives in public transport led to a mammoth growth in the number of cars on Indian roads leading to nothing but congestion and high pollution levels having high economic and social costs to the productivity of the country as a whole. It acknowledges regulatory flaw in limiting taxi permits to curtail congestion and pollution as it resulted in exactly what it wanted to prevent: congestion and pollution. This report intends to promote shared mobility, liberalise the existing taxi permit and encourage new forms of urban mobility to create reliable alternatives to car ownership. If implemented, it would radically transform the governance ideology that has till date structured public service infrastructure in the country. It proposes to remove limits placed on grant of “all” types of permits, a policy move so out of tune with the ground realities.

For instance, un-freezing the limits on permits so that more and more metered and aggregator taxis can be pushed onto the roads is misplaced as it will add to the city’s traffic woes. Taxi union leader and metered taximen shared that very few drivers want to put in new taxis due to declining incomes, simultaneously increasing financial pressures. Thus, this policy decision serves one purpose, that is, deflect adverse reaction towards the government. One of the seven goals listed in the MORTH (2016: 4) policy are, “liberalise the overall industry and embrace technology.” This sums up the paradigmatic change in approach of the regulators towards opening the taxi sector, rather the transport sector for aggregators. It allows city taxis to run on the aggregator’s app, on their pricing models and structure. It proposes easy conversion of private vehicles to commercial permit type which if implemented is, theoretically speaking, aimed at better asset utilisation (private car) but is detrimental for professional taximen as has been pointed out by Biju Mathew (2016) in the case of New York taximen. This conversion has great potential to accentuate the stress of earnings, further casualise and precarise the work of cabbies who are dependent on taxis solely for their livelihoods. It is unequivocal in its support of dynamic pricing within a specified range and to not impose “irrational” conditions for aggregator and to consistently “lower entry barriers” (Mathew 2016: 4). Another significant control proposed (if implemented, it would have been first across the world) is the “one-time” auditing of companies’ software and algorithms. It could have brought in a check on algorithms, “algorithmic management” (Rosenblat and Stark 2016; Wood et al 2018) the backbone of aggregator model and its most opaque aspect. It would have been a move to protect public interest and labour rights. However, I argue, one-time approval would not suffice as algorithms are constantly changed, tweaked and updated depending on the constant data analysis that is carried out by them simultaneously of every little piece of data collected by their apps. Check on algorithm would be apt only if it reviews each change. However, this would be difficult to implement as changes in algorithms in response to data analysis are constant, varying from slight to major transformations and have remained unannounced till date, tilting the power balance in skewed proportions towards the aggregators, away from the public, and also away from the government. Algorithmic-based operations marketed as transparent and unbiased are the most opaque and it is vital for the state to be (at least) in the know of to what end the algorithms function.

A study by the MORTH highlights the bend of the central government towards the aggregators, a readiness to accept aggregators as saviours of its Indian cities, urban chaos and crisis. The MORTH’s (2016: 4) insistence “to create a national ecosystem for taxi aggregator” coupled with the stance that “aggregators can aggregate all types of vehicles” (2016: 22) signals a probable credence in aggregators to later take up more modes of public transport in the future, like public bus transport (for example, an app called Shuttl in the National Capital Region). It signals through its nascent stages the government’s gradual exit from public transportation. This is probably in line with the government’s gradual but consistent withdrawal from many public services in order to cut the state’s expenditure. If this does come true, one would have to question, will the idea of public service still drive “public transport” especially if charges will be dynamically (market) determined? Will not this further deepen the privatisation or a greater commoditisation of public service? This question is not anti-apps or against efficient private business practices. However, what it does aim to ask is: If crucial services like commute, public transport are left entirely in private hands, on market and algorithmic logic, then will these services subscribe to the public service principle of being available to all city residents? Can monopoly or predatory expansions then be checked? Can the state then ensure accountability and answerability from these actors? Will this innovative disruption lead to inclusive cities? These are important questions to be considered before a paradigmatic shift is enforced by the state.

The year 2017 saw another set of rules as the legal vacuum persisted. The Maharashtra City Taxi Rules 2017 (Home Department 2017) in March 2017 proposed mandatory licences and few stringent regulations regarding which few aggregator drivers moved Bombay High Court (Khatua Committee 2017). The MCTR 2017 disproves of AITP vehicles (T-permit taxis) to operate as city taxis. All taxis associating with aggregators had to draw city taxi permits by paying a fee, subscribing to fuel and PSV badge rules. Kaali-peelis could convert to aggregators after obtaining the city taxi permit. It fixes responsibility of aggregators for the driver’s conduct, misconduct, any complaint against him and bars them from street hailing completely. It would fix a floor and ceiling price between which the dynamic pricing can operate.

The author’s independent reviews of the MORTH’s 2016 report (central) and MCTR, 2017 (state) bring out the divergences in inclinations between central and state governments. MORTH is seen to be accepting of the Uber/Ola’s discourse. On the other hand, the state government has each time proposed stringent and exacting regulations, and has thus become a target of public opinion mobilisation undertaken through blogs by the PR machinery of aggregators. The MORTH has been observed to be accepting of the aggregators’ narrative that they can reduce traffic and pollution by shifting people away from buying personal cars that lie as underutilised assets. The state needs to understand that ownership of cars is not merely an aspect of mobility in Indian society. Ownership of car and its cost is closely associated with people’s purchasing power and with their income which is seen as a clear marker of one’s social standing in Indian society. Therefore, the ambition of Uber and Ola to alter these attitudes needs time. Attitude changes are slow and are difficult to be predicted entirely on market logic. Even if the said shift happens it is still crucial to ask: Should market logic replace “public service?” How can market logic be regulated? A worrying trend is the hurried acceptance of aggregators as a solution to congested and polluted cities by central policymakers without undertaking any independent research and thus, hastily liberalising the Intermediate Public Transport (IPT).

The Khatua Committee

The Khatua Committee was constituted in 2016 at the state level as part of the process of revising fares of metered cabs and autorickshaws every five years, however, this time with an expanded mandate to suggest fares for city taxis or aggregator cabs. The Khatua Committee noted the lack of independent data with the government, disparate data collection. It relied on the aggregators for data and discussions with independent domain experts. It is important to question and plug the skewed availability of data especially in policymaking given the fact that Uber as a company has been accused of and confessed at “greyballing” to dodge regulators.5 The Khatua Committee noted the negative impact of aggregators on radio and fleet taxis, the fact that incentive-subsidy model is unsustainable as it will inevitably result in perennial losses and thus is inherently monopolistic. These observations corroborate with historically informed projections of metered taxi drivers that are dismissed as biased opinions. Given the context dominated by aggregators, Khatua Committee suggested two fundamental changes for the state regulated kaali-peelis: “telescopic fares” and “happy hour discounts” despite simultaneously noting kaali-peelis should not be merged with aggregators; street hailing is important and they could run on fares of the Mumbai Metropolitan Region Transport Authority and not on dynamic pricing while on the platforms, insisting their different “identity and purpose.” To incentivise long-distance commutes “telescopic pricing” would offer competitive fares for long-distance commuters, that is, provide “appropriate fare discounts after specified distances” (Khatua Committee 2017). “Happy hour discounts” are lean hour discounts “in order to attract more number of commuters” (Khatua Committee 2017: 45). The committee reasoned, this is an accepted practice in other industries like airlines, hotels and multiplex cinema halls. Such rationalisation compels me to first ask airlines, hotels and multiplex cinema halls to reduce and then also increase fares according to their business rationale and profit calculations. Is it correct to compare taxis—a public service—to profit-making ventures, when in fact the costs of running the public service here are borne by individual drivers and not by the state or by some organisation with deep pockets? If reductions are made in view of drop in demand, then by that logic should not fares increase in view of increased traffic, and increased demand? Why is it that the taxi driver should pay for providing a public service? Second, is it fear of complete obsolescence that is pushing metered taxi drivers to agree to this dire measure to rescue their work? Third, will reducing the fare through discounts and telescopic pricing perpetuate a perception that the state-mandated fares were unjustified, higher and not in the public interest? Finally, what is the state’s role as a regulator: to accede to the circumstances or to ensure that a practice in the public interest is upheld—one that is non-exploitative to the drivers and non-extortionist to the public as well?

The Khatua Committee recommended removal of irrational rules for aggregators, such as, it held that fuel change could be effected through a gradual process as there is no technology at the moment for it and the fact that post-MCTR 2016 notification new vehicles are complying with the clean fuel policy. Also, replacing newly bought vehicles would put an unnecessary
financial burden on the drivers. The Khatua Committee giving more time for shift to clean fuel is a demonstration of aggregator’s strategy of launching in a state of legal vacuum, expanding by gaining people through network effect without coming under the legal purview, consolidate their position and then advance greater bargaining power by transferring financial burdens, risks onto its drivers. Now the state is not merely making rules for platforms but also for individual drivers, considerable in number. This, I argue, increasingly binds the state vis-á-vis the platform companies in its role as a regulator and supervisor.

One of the most fundamental recommendations proposed is that the state would fix the floor and ceiling price within which dynamic pricing can operate to counter surge pricing’s tendency to be anti-customer in cases of extremely high demands or in cases of low demand-low supply areas. The Khatua Committee (2017: 118) presenting a balanced view held “pragmatic and moderate fare structure is desirable for long-term sustainability” and can be seen to be pushed only by state and not by market forces.

Starting with the first draft of regulation in 2015, the Khatua Committee is the sixth committee report, however, none till date has been implemented. After the Khatua Committee report in 2017, the Motor Vehicle Amendment (MVA) Bill 1988 was amended by both the houses of Parliament and passed in 2018 which implies that all state regulations will have to adhere to its broad framework which now recognises aggregators. Yet, seven policies later, the legal vacuum persists.

Takeaway

Four years and seven drafts later a legal vacuum persists with multiple, ambiguous, divergent directives with no final word on which policy finally stands. Delay raises questions on authorities’ resources, skills, and political will to end the legal vacuum which has been immensely profitable to the aggregators. The state, public, taxi trade and the aggregator drivers lose. Aggregator drivers do not figure in negotiations and policy framing though it is they who will bear the cost of its implementation. None of the policies specify the relationship between aggregators and its drivers by going beyond the mythic and rhetorical driver autonomy, entrepreneurship and flexibility that has been popularised by the companies, however, revealed by many studies in different countries (Malin and Chandler 2016; Schor 2014) to be untrue and a cover up strategy for their growth plans that essentially are predatory. Their drivers’ scattered presence in the city like any other taxi driver along with changing individualised pay patterns, distinct incentive structures and no institutional and structural transparency blocks chances of forming long-standing associations or unions that could forge a collective, strong and sustained representative voice for them. Finding a common ground with varying particularities becomes a struggle. In any arbitration, communication channels from drivers to companies are complex and ambiguous. They lack a seat at negotiation tables deciding policies for them. It is nothing but a total disregard of drivers as valuable urban labour. They are left with depleting earnings, longer working hours, arbitrary delisting, which then manifested in more than 10-day long strike of Ola and Uber drivers in Mumbai in October 2018, seeing a resurgence in November 2018 demanding greater accountability from companies, security and income levels that are sustainable and adequate. The companies refuse to bow down, the state’s role in arbitration continues to be sparse, undefined because there is yet no policy stating authorities’ purview in intervention. The ones who are at the losing end, while driving or while striking are drivers: financially and in the eyes of the public. They are blamed to be causing inconvenience. It is time that the city and the state wake up and lend them an ear.

Notes

1 In the context of globalisation there are numerous economic activities (for example, aggregators) that are novel in organisational or locational features in a manner “that they do not appear to violate existing regulatory frameworks, they cannot be said to comply with them either” (Sassen 2000: 220).

2 When metered taxi shows a high, arbitrary fare, the policeman has the authority to call him aside, examine the validity of the complaint and if found true can immediately generate a challan (fine) against the driver’s name. Accounting for violation is unambiguous. Not only is the fine paid but meter has to be passed and certified again. There is clearly defined jurisdiction which settles violations. In the case of the aggregators, there is no knowledge who is the rightful authority.

3 In the case of a rape of a woman by an Uber driver in New Delhi, the police found it difficult to track Uber’s office. Only after installing the app, the police could take the ride to Uber’s Gurgaon office. This took almost 12 hours. In this case Uber maintained that because the driver was not its employee the company could not be held accountable. Similarly, Malin and Chandler (2016) quote one of Uber’s female drivers recalling how she complained to the company about her molestation experience while driving for Uber to which she got no
reply, not even an acknowledgement of the complaint let alone a reassurance that they will penalise the passenger by disconnecting him. They note that their respondent then
felt the real pinch of being an “independent contractor” (p 395).

4 Dubal (2017: 124) notes that apprehending fines for violations in the US, Uber Cabs dropped “cabs” from its name.

5 According to reports in the Guardian, Greyball was part of a programme called VTOS “violation of terms of service” in which after collecting information from geolocation data, credit card information, social media accounts certain people would be tagged by the company as officials working for city agencies. Once tagged, these officials would see a fake interface every time they opened the app wherein the digital images of cars that were shown to them were unreal and they could never book a ride in that case. Even in cases when some driver took their ride request, Uber intervened and got the driver to cancel the ride. This surfaced according to reports in these papers in March 2017 in the city of Portland where Uber had not met any regulations and had started operations. They tagged officials in order to prevent their drivers from being fined/ticketed. This revealed the breach Uber was committing, and this programme was passed by its legal cell. Uber maintained that “it denies ride requests to fraudulent users who are violating our terms of service” (https://www.theguardian.com/technology/2017/mar/03/uber-secret-program-greyball-resignation-ed-baker). By 8 March 2017 Uber came out with an update on Greyball on its blog by Joe Sullivan, chief security officer detailing this programme is running for purposes like testing a new software, to prevent physical harm to its partners (drivers). It further commits, “we are expressly prohibiting its use to target action by local regulators going forward” (https://www.uber.com/newsroom/an-update-on-greyballing/). Now one does not know if such usage has been limited after Uber was exposed or if it still continues.

References

Dubal, V B (2017): “The Drive to Precarity: A Political History of Work, Regulation and Labour Advocacy in San Francisco’s Taxi and Uber Economics,” Berkeley Journal of Employment and Labour Law, Vol 38, No 1, pp 73–135.

Home Department (2015): “Maharashtra Motor Vehicles (Amendment) Rules,” Mantralaya, Mumbai: Government Press.

— (2016): “Maharshtra City Taxi Rules, 2016,” Mantralya, Mumbai: Government Press.

— (2017): “Maharshtra City Taxi Rules, 2017,” Mantralya, Mumbai: Government Press.

Khatua, B C (2017): “Committee for Determination of Fare Structure of Taxis and Auto Rickshaws in Maharashtra,” Mumbai: Government Press.

Lenaerts, Karolien, Miroslav Beblavy and Zachary Kilhoffer (2017): “Government Responses to the Platform Economy: Where Do We Stand?,” CEPS Policy Insights No 2017–30, pp 1–14.

Lobel, Orly (2016): “The Law of the Platform,” Minnesota Law Review, Vol 101, No 87, pp 88–166.

Mathew, Biju (2016): “Reflecting on the Share Economy and Urbanising Capital,” Economic & Political Weekly, No 5, pp 35–39.

Malin, B J and Curry Chandler (2016): “Free to Work Anxiously: Splintering Precarity Among Drivers for Uber and Lyft,” Communication, Culture and Critique, Vol 10, No 2, pp 382–400.

MoRTH (2015): “Advisory for Licensing, Compliance and Liability of On-demand Information Technology-based Transportation Aggregator [Taxis (4+1)] Operating within the Jurisdiction of India,” Ministry of Road Transport and Highways, Parivahan Bhavan, New Delhi: Government Press.

— (2016): “Report of the Committee Constituted to Propose Taxi Policy Guideline to Promote Urban Mobility,” Parivahan Bhavan, New Delhi: Government Press.

Rosenblat, Alex and Luke Stark (2016): “Algorithmic Labour and Informational Asymmetries: A Case Study of Uber’s Drivers,” International Journal of Communication, Vol 10, pp 3758–84.

Sassen, Saskia (2000): “Spatialities and Temporalities of the Global: Elements for a Theorisation,” Public Culture, Vol 1, No 12, pp 215–32.

Schor, Juliet (2014): “Debating the Sharing Economy,” Great Transition Initiative, https://greattransition.org/publication/debating-the-sharing-economy.

Sen, Sumit (2018): “With Ola,Uber Cabbies on Strike, Roads Breathed Easy and Vehicles Moved Faster in Mumbai,” Times of India, 5 November, https://timesofindia.indiatimes.com/city/mumbai/with-ola-uber-cabbies-on....

Shapiro, Aaron (2017): “Between Autonomy and Control: Strategies of Arbitrage in the “On Demand” Economy,” New Media and Society, Vol 20, No 8, pp 2954–71.

Srineck, Nick (2017): Platform Capitalism, Cambridge: Polity Press.

Wood, Alex J, Mark Graham, Vili Lehdonvirta and Isis Hjorth (2018): “Good Gig, Bad Big:
Autonomy and Algorithmic Control in the Global Gig Economy,” Work, Employment and Society, Vol 33, No 1, pp 56–75.

Updated On : 25th Nov, 2019

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