Bengaluru: On the face of it, the cab aggregator business in the city is thriving, but banking and non-banking finance companies are refusing to extend loans to would-be drivers. Drivers claimed that low income from app-based services like Uber and Ola is making banks cagey.
Mr Ramesh Gowda, a member of the Bruhat Bengaluru Taxi Driver's Union, claimed, “Vehicles are being seized in large numbers by banks and financial institutions. Syndicate Bank, SBI, Corporation Bank, Karnataka Bank and others have stopped giving four-wheeler loans to drivers because of poor recovery."
He said, “Ola and Uber started off with a great hype. While the demand has remained the same, there are far too many cabs on the roads, which has led to a drop in the incentives given out to drivers by these companies. Last month, I saw a local bank seizing 23 vehicles in one day.”
He said that once the incentives go down, drivers find it difficult to make the ends meet with the EMIs, house rent, fuel and insurance.
Mr Somashekar, a member of a driver's union, said, “We have around 3,000 drivers in our union. For every 100 members, only 30 have been able to repay their vehicle loans. The rest have lost their cars. The situation is quite bad. Companies are running out of space to park seized vehicles."
Mr Shubash, a senior executive working with a prominent transport finance company, said the risk is too high for lending institutions to give out money for drivers to buy cabs. “We usually look at the IT returns filed over the previous three years by a person before giving him a loan. The problem is also that many drivers from small towns want to buy cabs and attach them to Ola/Uber, but have no IT returns to show. The worrying part is that incentives for existing drivers have gone down. The drivers are struggling to make nine trips per day, required to get incentives, due to excess competition,” he said. “The fares are also unsteady with cab apps. For the same distance, I pay different rates in the morning and evening. People have also taken to Metro now, which has translated into losses for cabbies. We can't afford to give bad loans now," he said.
