India: Softbank-backed Ola seeks relief for drivers, taxi firms

Indian ride-hailing company Ola, backed by Softbank Group, wants loan waivers for drivers and a delay in tax payments to make up for coronavirus-related lost income, according to a source and document seen by Reuters.

India imposed a 21-day nationwide lockdown from Wednesday to limit the spread of the virus, which has infected more than 600 and claimed 10 lives in the country of more than 1.3 billion people.

Ola has thousands of drivers in India, as does rival Uber Technologies, and wants short-term, interest-free loans for taxi aggregators to meet their working capital needs as well as a six-month delay to payment of certain taxes, according to a letter to India‘s federal think-tank and industry lobby groups.

“Mobility as a public utility service is the worst hit during these stressed times,” Ola said in the letter, contents of which were seen by Reuters.

“The driver partners associated with ride-hailing companies who are dependent on such services for their daily livelihoods are already experiencing a near-complete loss of income.”

Ola is also seeking the government’s help to secure a 12-month “holiday” on car loan repayments to ease the pressure on drivers and set up a fund for those who have lost their daily income.

The company also wants a support fund for ride-hailing companies and relief for large fleet operators.

While Ola and Uber provide livelihoods for thousands of drivers in India, those drivers are not deemed employees, which means they do not receive monthly salaries and several other employment benefits.

A majority of the 2 million vehicles on Ola‘s platform are owned by drivers, many of whom take loans to fund the car’s purchase. The money they earn ferrying passengers is used to meet loan repayments and other personal expenses.

About 60% to 70% of drivers with ride-hailing companies in India are servicing car loans taken from banks and other finance companies, industry estimates show.

The company also owns a fleet of tens of thousands of cars that drivers can take on lease by paying a weekly rental of about 5,200 rupees ($68).

It did not directly comment on the letter but said in a statement that it is providing certain insurance and medical benefits to its drivers as well as waiving rental charges.

Ola, one of Softbank‘s biggest bets in India, plans to make submissions to other ministries for help, including the finance and road transport ministries, said a source with direct knowledge of the matter.

Reuters

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.