Ola launches a zero-commission model for drivers with a required subscription
In a notable shift in the ride-hailing landscape, Ola has rolled out a new revenue model for its driver-partners, eliminating commission cuts on ride fares. Under this Zero Commission Model, Ola drivers can now retain 100% of their ride earnings, offering them potentially higher incomes and greater financial independence. This move comes as Ola explores an alternative to the conventional commission-based framework long used across the ride-hailing industry.
The Catch: A Mandatory Subscription Model
However, the model isn’t entirely cost-free. Instead of charging per ride, Ola is pivoting to a Subscription-as-a-Service (SaaS) model. Drivers will be required to purchase a daily or monthly pass to avail of the zero-commission benefit. While this could offer cost predictability and remove the burden of paying a percentage on every trip, it means drivers will still have a recurring expense, the pricing of which has not yet been disclosed by Ola.
This model promises uncapped income potential, since drivers won’t lose a portion of each fare to platform fees. However, the success and value of the offering will depend heavily on the pricing of the subscription and how often a driver is active. Those with high daily ride volumes may find the model especially beneficial.
A First in India’s Ride-Hailing Ecosystem?
Ola claims to be the first ride-hailing platform in India to adopt the SaaS approach, setting a precedent for potential industry-wide change. Traditionally, ride platforms take a cut of 20% to 30% of the fare from drivers. If Ola’s model proves sustainable and popular among drivers, competitors may be pressured to reevaluate their own commission strategies.
For now, the announcement signals a shift toward more driver-centric models, even if Ola’s version involves an upfront investment from its partners.
