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Uber Drivers Go On To Strike In Dhaka And What It Means For Ride-hailing Companies In Bangladesh

Uber drivers' strike finally has come to Dhaka. Two groups of Uber drivers in Bangladesh have announced a 24-hour strike on Monday starting from Sunday midnight.

Dhaka Ridesharing Drivers Union and Bangladesh Ridesharing Drivers Association called the strike on Sunday to protest against “different irregularities”.

The striking drivers put forward an eight-point demand list went unmet the groups threatened further programs, reports the Financial Express. The demands include:

  • Fixing fare per kilometer and minute from start to end of every trip.
  • Reducing Uber’s commission to 12 percent from 25 percent.
  • Raising fare due to a hike in gas prices.
  • Arranging trips near destinations under the ‘Destination’ option in the app.
  • Ensuring security of the drivers. Arranging compensation if passengers cause damage to vehicles.
  • Taking no action against the drivers without investigating passenger complaints.
  • Making it compulsory for passengers to provide own image in their Uber accounts.
  • Arranging initial training for passengers on location. Putting a ceiling of two kilometers on the maximum distance between the drivers and passengers.

The group said that they have discussed the issues with Uber several times but found no proper solution. Uber operation Dhaka issued a statement saying that the disruption is caused by a small group and that it has processes in place to address the complaints and issues of drivers through in-app feedback and Partner Sheba Kendras.

Drivers strikes - an increasingly common challenge for ride-hailing companies

[su_highlight background="#efd69c" color="#1d1f16"]As companies like Uber and Lyft play an increasingly outsized role in public life, the regulations are likely to come. This is already happening in cities like California and London and will be a common thing in most cities in the coming years where these companies operate. The challenging part is that these companies are built on a business model where drivers are considered as merchants/partners like ecommerce platforms and when that relationship with drivers changes into a more permanent relationship like employees, as it is happening in California, it will potentially affect the entire business model of these companies.[/su_highlight]

Drivers strikes have become a new normal for ride-hailing companies across the world, particularly for Uber and Lyft. For example, Uber and Lyft have seen drivers strike over pay and conditions in almost all major cities where they operate.

The treatment of drivers by ride-hailing companies and their relationship with drivers have been an issue of hot debate among policymakers, regulators and business analysts. In fact, California recently passed a bill titled AB5 to regulate gig economy companies where companies like Uber and Lyft have to treat their driver-partners as employees and provide benefits accordingly.

This has also been the case in this part of the world. In India, we saw a series of quite long strikes by Ola drivers and Uber drivers. Go-Jek in Indonesia and Grab in Singapore and Malaysia faced similar challenges in the past. The difference in these, however, has been that ride-hailing companies are yet to face any regulatory scrutiny over their relationship with drivers, which has happened in the West. There has been limited regulatory discussion around the relationship between drivers and ride-hailing companies.

A long road ahead

Companies like Uber, Pathao, Shohoz, Lyft, Grab are new in nature. There has been a little regulatory framework for these companies. More so in countries like Bangladesh where internet companies are still a young phenomenon.

This scenario is changing rapidly. As companies like Uber and Lyft play an increasingly outsized role in public life, the regulations are likely to come. This is already happening in cities like California and London and will be a common thing in most cities in the coming years where these companies operate.

The challenging part is that these companies are built on a business model where drivers are considered as merchants/partners like ecommerce platforms and when that relationship with drivers changes into a more permanent relationship like employees, as it is happening in California, it will potentially affect the entire business model of these companies.

The changes in the regulatory environment have already been showing on the business decisions of these companies. Uber is expanding aggressively outside of the ride business.

Grab has been playing the super-app game for a while now.

Pathao and Shohoz have also been walking the same route.

There are more changes to come in the future. As it is, the ride is going to be a long one for ride-hailing companies in the coming years.

Ruhul Kader is a technology and business analyst based in Dhaka, Bangladesh. He is also the co-founder and CEO of Future Startup and author of Rethinking Failure: A short guide to living an entrepreneurial life. He writes about internet business, strategy, technology, technology policy, and society. He can be reached at [email protected]

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