inDrive’s bid-based ride-hailing business model is significant in the rideshare industry because it creates a balance for both gig drivers and riders alike. Or so it thought.
In conventional ride-hailing apps, the cost of a ride is determined by the app, and passengers have no control over the amount they pay. Riders who feel that they are being overcharged may find this frustrating. This concept has helped businesses and car owners, much to the delight of its investors and drivers.
The inDrive launch changed the tide and gave riders the upper hand. Riders can choose their own ride prices according to the company’s bid-based business strategy. Riders can save money on rides as a result and have more control over their spending.
Additionally, the bid-based concept is more open than the conventional one. The bids of other passengers and drivers are both visible to both parties. This openness makes it possible to make sure that both drivers and passengers are treated fairly.
The bid-based methodology used by InDrive is still very new. It only recently began operating in Port Harcourt City after being introduced in Nigeria ten years ago. The company has, however, demonstrated the ability to upend the ridesharing market. In 2022, inDrive was named the ride-hailing service with the fastest global growth. Today, drivers all over the world are criticizing its model.
What’s the fuss about?
Tobias Kuttler, a researcher with Fairwork, a labor project by the Oxford Internet Institute and WZB Berlin Social Science Center, claims that InDrive, which claims to “empower passengers and drivers, not algorithms,” is actually giving drivers in Pakistan “a false sense of power.”
“Drivers believe that they must eventually follow what the consumer requests. They are less likely to demand greater offers, he claimed.
Gig drivers in Pakistan claim that because they are forced to accept the lowest charges, the app has made their jobs more competitive. They also emphasized how long it takes them to bargain for costs.
Similar opposition to inDrive’s bid-based business model has been observed in other nations. According to research conducted by Fairwork in 2022, Mexican drivers were skeptical of the bid-based concept, with some claiming that negotiating did not “automatically ensure a fair price.”Â
The likes of Uber and Bolt, who have previously been condemned for their large commission fees, surely seem like the better choices for Nigerian gig drivers.
The majority of ride-hailing businesses operate on razor-thin profit margins, but in Nigeria, prices are rising as additional expenses are borne by both the businesses and the drivers. As a result, consumer costs are increasing, which may eventually reduce business margins. Costs for rides are rising.
From the rider’s point of view, Uber and Bolt offer more value to the driver and will be happy to take up inDrive’s model. On the other hand, drivers feel totally neglected by inDrive’s model. The market forces of economics will have to decide on this one.
