Ride-hailing platform Uber has introduced a subscription-based model for auto drivers nationwide. Uber’s competitors, such as Rapido and Namma Yatri, already offer subscription-based models for auto drivers.
“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 told TNIE.
Uber, which also provides cab, shuttle, and bike services, stated that its Auto segment was the company’s most-used product in 2024. So far, Uber was running with its traditional commission-based revenue model for auto drivers where it kept a share of the fare for every ride as commission.
In a blog post, Uber announced a significant shift with its new Auto model, adopting a SaaS (Software-as-a-Service) approach. Uber will now connect riders with nearby drivers, but the service itself will operate independently of Uber.
Riders will need to pay drivers directly in cash or via UPI (using the driver’s UPI ID). Digital payment methods such as credit/debit cards, integrated UPI payments through the Uber app, or Uber credits will no longer be applicable.
Uber credits and promotions cannot be used for auto trips. While Uber will suggest a fare, the final amount will be determined by the driver and rider. “We’re not involved in fare-related disputes between riders and drivers, but we’re here for safety concerns,” Uber stated.
Regarding safety, Uber emphasized that if passengers experience any concerns during the ride, they should report them immediately through the Uber app, and the team will review the incident promptly.
Uber also informed that no GST will be collected from passengers or drivers for auto trips, meaning the fare will not include any taxes.
Last year, Uber and others approached the finance ministry, Goods and Services Tax Council and the Authority for Advance Rulings (AAR) seeking clarity on whether their business was liable to tax or not. While few players are paying taxes, few were not liable to pay due to conflicting ARR rulings.