The recurring conflict between app-based ride services and traditional local taxi drivers has flared up again in Kerala. Recently, a viral video of a Mumbai tourist alleging harassment and being blocked from using an online cab in Munnar forced the state to urgently re-examine regulations in the competitive transport market.
Reading this crisis as a mere problem of unions 'resisting change' or reactionary forces holding back technological progress is tantamount to underestimating the structural conflict, systemic inequity of global digital business, and their impact on the local market as well as the workers.
Looking beneath the surface, the conflict is a manifestation of three interconnected political and economic processes: (1) the penetration of global financialised capital into local labour markets, (2) new forms of surplus value extraction through algorithmic mediation, and (3) the emergence of data colonialism.
Platform capitalism: Algorithmic governance and risk privatisation
On Uber, Ola and other platform models, algorithms are the real employers of drivers. It is the algorithm that sets fares, authorises trips, imposes penalties for cancellations, and even temporarily or permanently removes drivers from the platform based on star ratings. Drivers have no way to question these decisions or argue with a ‘human boss’. These algorithms are strategically designed to keep the workers invisible while the work is visible.
Unlike traditional capitalist institutions, the lean platforms do not create products, build factories, or employ workers. The purchase of the vehicle, insurance, fuel, maintenance, the risk of accidents, and all other financial burdens are placed on the drivers themselves—who are self-employed 'independent contractors'.
The platforms have traditionally charged drivers a high commission. However, facing market pressure and regulatory scrutiny, some platforms are now shifting to subscription or flat-fee models in certain cities. Despite these changes, the ‘privatisation of risk’ and ‘centralisation of profit’ are at the heart of this economic model.
Financial drain and data colonialism
This commission paid by drivers to lean platforms is a huge economic leakage from the local economy. In the traditional taxi sector, the money earned by drivers circulates within the state and is reinvested locally. While platforms may claim to reinvest some revenue into developing new local products, a large amount of the commission paid to platform companies flows out of the local market and ends up in their global headquarters.
In this model, the company focuses on profit without taking ownership or responsibility. With each trip, the company collects data more valuable than money—data on travel routes, demand patterns, and pricing responses. This data is the real capital of their business model.
Thus, the risks and costs of local markets are invested in the driver, and the lion's share of the revenue and the real capital, data, are captured by global corporations. This structural imbalance and concentration of profits negatively affects local economy and job growth.
Resistance and the structural failure of local alternatives
To reduce the resistance of traditional taxi drivers to “mere trade unionism” is to misunderstand the structural nature of this conflict. The auto-taxi sector in Kerala is not just a labour category – it is part of a social security system. Through union struggles for over a century, these workers have won minimum wages, a permit system, and social security. The platform economy, offering ‘flexibility’ that is actually ‘precarity’, is dismantling this entire system. The resistance is not simply about economic competition – it is about the protection of their social position, way of life, and social identity.
The reason why collaborative platforms like Kerala Savari failed is not a lack of technical knowledge – it is a structural feature of platform capitalism. The economic law of network effects creates ‘winner-takes-all markets,’ ensuring that only one or two platforms survive. Kerala Savari was unable to achieve this critical mass.
Furthermore, global companies with venture capital funding use ‘predatory pricing’—operating at a loss for years—to destroy local competitiveness. New local platforms cannot replicate the ‘machine learning-based predictive capability’ of global players because data is ‘path-dependent.’ This is not free market competition – it is an unequal war of financialized capital.
The conflict in Kerala is a microcosm of how 21st-century capitalism is reshaping the working class. Platform capitalism is a more subtle and invisible form of exploitation than traditional industrial capitalism—hidden behind algorithms and disguised in the language of ‘freedom.’
Solutions and the fight for a digital future
The market will not find solutions to these structural problems; state intervention is inevitable. This intervention must be a transition to a new paradigm that requires the exploration of alternative regulatory frameworks, drawing inspiration from cooperative governance models to ensure a pro-worker digital economy.
Across the globe, governments are recognizing the limits of the 'independent contractor' model: countries like Spain and rulings in the UK Supreme Court have already redefined the employment status of gig workers to guarantee basic rights like minimum wage and holidays. Kerala must adopt a similar approach by creating a 'third category' of labor that ensures minimum social security protections—such as health insurance and pensions—funded by a mandatory contribution levied on the platforms' massive commissions.
Furthermore, to combat data monopoly risks, the state should actively explore models like data trusts to treat critical travel data as a public good, making it accessible to all platforms (including local cooperatives) to restore true competition. Kerala’s success in theoretically understanding this new form of exploitation and responding with pragmatic, globally-informed policy will be a critical guide for the global South and the protection of workers' rights in the digital age.
Kerala’s success in understanding this new form of exploitation theoretically and responding policy-wise can be a guide for the global South and for the protection of workers’ rights in the digital age. The question is not being for or against technology – but rather for whom, in whose interests, and within which economic model should technology work.
(The author is a researcher at the Safar Foundation, Kolkata. He posts on X @akpk_in.)