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Uber adopts a no-commission approach to stay operational in New Delhi

The taxi-hailing app switches gears to remain operational in India, despite a ban on their main business due to an ongoing legal battle.


Uber in New Delhi, India has taken to a partial revival of its operations by removing its 20 percent driver's commission fee, offering drivers a monetary incentive of 250 rupees (about $5) for each completed trip.

Exclusive to New Delhi, the drastic shift in Uber's business framework came about after a ban on Uber's operation within the city.. While taxis available for booking are still shown in the app, Indian transport authorities are adamant about Uber's current restriction, and have been quick to impound any taxis found to be working with Uber.

Earlier last week, Uber's made an application for a taxi-fleet license and this was reportedly rejected by the New Delhi Transport Department -- though Uber denies this and claims that the application is still under review and has been issued "deficiency memos."

Uber's ongoing prohibition is the consequence of an alleged rape of a passenger by a licensed taxi driver working through the app. The outrage sparked concern for passenger safety and legality across New Delhi. A month has elapsed since the ban was put into effect, and the driver is currently on trial.

According to the company, these new measures currently allow Uber to operate legally, as the company works out details for a long-term solution with the Indian capital city's government.

Currently, Uber's framework and services are similar to PoochO, a New Delhi startup app founded by a joint-venture organisation between the New Delhi government and a not-for-profit company. PoochO managed to bypass the regulatory issues that Uber struggled with, thanks to its not-for-profit model, and connections to commercially-licensed drivers.

"Our goal is to serve the Delhi community. Since our re-launch we have adopted PoochO's model, one already approved and endorsed by the transportation department. This allows Uber to legally operate, enabling safe, reliable rides to an underserved public while working out the details of a long-term solution with the government," said Uber spokesman Karun Arya.

It's not the first time Uber has attempted such a strategy -- the company has previously tried operating with non-profit models outside of Asia to maintain operations. In Asia, however, Uber is currently struggling to adapt to the diverse business and legal climates.

"It hurts our business as we are not to going make any money. We will in fact spend money to run Delhi operations for our riders," said an unidentified senior Uber executive to Reuters.

January 29, 12.45 a.m.: The story was updated to reflect the there isn't an auto-rickshaw connection service for Uber and to clarify the language used about the reported rejection for the Taxi license.