American ride-hailing firm Uber launches zero commission model for auto drivers in India

American ride-hailing giant Uber has introduced a subscription-based model for auto drivers across India, moving away from its traditional commission-based approach.

The ride-hailing giant will now operate solely as a technology platform that connects riders and drivers, aiming to let drivers keep the entire fare from each trip.

Shift to a new model

The company reportedly said it was aligning with the industry’s growing emphasis on subscription plans to avoid being at a competitive disadvantage.

Under this model, Uber’s role is limited to providing a platform through its app. The driver and rider will agree on the final fare through negotiation, and Uber will not be responsible for how the ride is carried out.

This means the company will not intervene in cases of ride cancellations or refusals by the driver. The app will continue to suggest a fare, but it will no longer enforce any commission charges.

Notably, the company also mentioned that all payments will be made directly to the driver partner, as it will not charge any commission, process transactions, or track payments.

Growing industry trend

Uber’s move follows similar steps by other platforms, including Rapido and Namma Yatri, which have been offering zero commission or subscription-based models to auto drivers.

Rapido started such a system for cab drivers in late 2023 and extended it to auto drivers in early 2024. Ola has also reportedly piloted subscription features in several cities.

These changes stem from growing complaints by drivers over commissions charged by ride-hailing services and repeated strikes in cities such as Chennai. By eliminating commissions, companies hope to reduce driver unrest and improve service reliability for riders.

Benefits for drivers and riders

This switch to a subscription model could encourage more drivers to join these platforms since they keep the full fare without sharing a percentage with Uber or other aggregators.

In theory, this is expected to lessen ride cancellations, as drivers have a stronger incentive to accept more trips. It may also remove some friction between drivers and customers, who often express frustration over unpredictable fares or sudden cancellations.