Uber says subscription model is boosting driver engagement as ride-hailing market grows 40%

As India's ride-hailing market grows at upwards of 40% annually, Uber is betting that giving drivers greater control over their earnings will help it attract more drivers and keep them active on the platform. The company says its shift from a commission-based system to subscription passes is helping it build a larger driver base and improve engagement, while allowing drivers to decide how much they want to work and how much they pay to access the platform.

“We are seeing a larger base of drivers come to us. And even in that larger base, a much bigger base of drivers engage much more,” Aditya Kapoor, director of supply operations at Uber, told Fortune India. The company has around 20 lakh drivers engaging with its platform monthly in India and adds approximately 2 lakh to 2.5 lakh new drivers every month, although some leave the platform and return later.

Kapoor said the subscription model gives drivers greater control over their earnings by replacing commissions on trips with a fixed fee for accessing the platform. The fee varies by vehicle category and city, and drivers can choose between passes based on time or earnings. Uber introduced the model in India as a local innovation and is now experimenting with it in a few cities in other markets, although those trials remain at an early stage.

“We felt that with this model transparency will increase massively,” Kapoor said, adding that the structure also allows Uber to understand more clearly and sooner how many drivers it will have on the platform.

Putting the incentive in the driver's hands

The subscription system offers passes ranging from six hours to 180 days, catering to drivers with different working patterns. A full-time auto driver working eight hours a day and looking to maximise daily earnings may choose a shorter-duration pass, while a student driving a bike taxi for a couple of hours a day to meet expenses such as rent or equated monthly instalments may prefer a longer-duration option.

Uber has also introduced earning-based passes, allowing drivers to pay for platform access against a target rather than a fixed period. A driver can, for instance, choose a pass linked to ₹10,000 in earnings and renew it after reaching that threshold. Under the postpaid option, drivers can begin taking trips and pay for the pass after earning their first few thousand rupees, reducing the need for an upfront payment.

The economics of the model depend on how much a driver uses the platform. Kapoor illustrated this with a hypothetical ₹100 daily pass. A driver completing five trips would effectively pay ₹20 per trip in subscription costs. If the driver completes 20 trips, that falls to ₹5 per trip.

“Now, all incentives are in their hands,” Kapoor said. Under the earlier commission model, Uber used incentives based on demand and supply. The subscription system, he said, makes drivers the decision-makers on how much they work and which pass suits their needs.

Uber has not disclosed the subscription charges, which vary according to the city and vehicle category.

The company is making the shift as competition for both drivers and riders intensifies. Kapoor said Indian consumers remain value-conscious and may switch platforms for cheaper rides, but also value trust and standardised service. Uber's strategy is to offer different mobility options, from bikes and autos to economy and premium cars, while ensuring drivers have sufficient earning opportunities to remain on the platform.

The growth opportunity is expanding beyond major cities. Uber has recently increased its presence from 125 cities to 225, adding 100 cities, and says it is seeing demand from smaller towns as well as metros.

Uber expects to capture a share of the market expansion through its range of mobility products, with the subscription model forming part of its effort to make the platform more attractive to drivers as the market grows.