Ride hailing platform inDrive is again touting the value of its business model, arguing the ability to negotiate fares outside of typical algorithms used in the sector has better outcomes for riders and drivers.
While rival platforms such as Uber and Bolt use dynamic pricing models — where fares vary depending on factors such as distance of travel, driver supply, consumer demand, time of day, duration and area — inDrive uses a bidding system where consumers and drivers agree on a price before the trip takes place.
New research by Oxford Economics in collaboration with inDrive shows positive results for in‑app fare negotiation, with riders and drivers “completing more trips, achieving fairer outcomes and improving access to transport”.
Oxford Economics used survey data from riders and drivers across seven emerging markets in Latin America, the Middle East and North Africa and South Asia for the analysis.
“Our research finds fare negotiation can bring additional rides into the system by enabling mutually beneficial trips that would not otherwise occur,” said the firm.
According to the findings, nearly two-thirds of inDrive riders and drivers surveyed in Latin America said they took more rides than they would have elsewhere due to fare negotiation. Oxford Economics observed a similar pattern across the Middle East and North Africa. In Egypt, 65% of riders and 43% of drivers reported the same effect, in Morocco 64% and 58%, and in Pakistan 59% and 54%, respectively.
inDrive argued that in South Africa, “where incomes, trip distances and transport options vary widely across cities and towns, this flexible pricing model helps make rides more affordable for passengers while allowing drivers to earn a sustainable income”.
While this model has obvious benefits, particularly in emerging economies, the bidding system has faced criticism for ultimately disadvantaging drivers as consumers look for and accept the cheapest deals they can get. Drivers, feeling the pressure to not lose business, accept lower fares, thereby driving down overall prices on the platform.
inDrive is a US-based service with more than 240-million downloads, operating in 1,065 cities across 48 countries. The company is represented in more than 16 SA cities, including Cape Town, Johannesburg, Pretoria, Durban, Gqeberha, East London, Pietermaritzburg, Rustenburg and Polokwane.
“Instead of replacing algorithms, in‑app negotiation builds on them by giving riders and drivers discretion to reach prices that reflect real conditions,” said Ashif Black, country representative for inDrive South Africa.
Black said this adaptability can unlock rides that would otherwise not be completed due to mismatch between fixed estimates and local expectations.
“Direct fare negotiation empowers South African drivers and riders alike to agree on prices reflective of real‑world conditions, from daily commuters to shift workers and informal economy users.
“The study shows what we have known all along, that flexible pricing helps more people get around while supporting drivers’ livelihoods, making mobility work for everyone.”
Compensation for e-hailing drivers continues to be a contentious issue in SA as one of the biggest sources of work in the gig economy, a labour market characterised by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.
The country has seen a number of strikes and protests by drivers amid growing frustration over high commission and rigid pricing structures imposed by platforms.
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