India’s new taxi cooperative aims to empower drivers, challenge ride-hailing apps

A new taxi service, backed by eight cooperatives, is set to change the way Indians book their rides.

The service, registered as the Multi-State Sahakari Taxi Cooperative Ltd, is backed by the National Cooperative Development Corporation as well as seven other leading Indian cooperative institutions: Amul, NDDB, NABARD, IFFCO, KRIBHCO, NAFED and the National Cooperative Export Limited.

These institutions have jointly committed US$ 9 million, out of an authorised capital of US$ 34 million. The cooperative's area of operation will span Gujarat, Maharashtra, Delhi and Uttar Pradesh, and 200 drivers across four states have been onboarded.

The taxi service – it will reportedly be launched under the brand “Bharat” – marks an important development in how the gig economy might evolve and participate in India's growth story.

It represents a rare attempt to build a digital platform where the drivers are not just service providers but also co-owners of the business.

India's ride-hailing industry has grown rapidly over the past decade. Taxi services are expected to grow from $20.5 billion in 2024 to over $61.5 billion by 2033, offering urban consumers convenience and affordable transport.

But for the drivers who have onboarded these platforms, and are often referred to as partners, the reality has been marked by different challenges: rising platform commissions, opaque algorithmic rules, earnings uncertainty and limited access to social protections.

The premise of this initiative is simple yet significant – drivers become shareholding members, with governance rights and a direct claim to future surpluses.

This ownership model stands in stark contrast to the dominant ride-hailing platforms, where workers are partners in name only. They bear operational costs even as they have little to no voice in how the platform is run.

What sets Bharat taxi apart is its decision to apply cooperative governance to a tech-enabled service model. Under the cooperative structure, every member has a vote, and key decisions are made transparently and collectively.

The interim board already includes representatives from all seven promoting institutions, providing both domain expertise and operational stewardship.

This governance model breaks from the top-down logic of conventional platforms, where decisions on pricing, incentives or driver penalties are often made algorithmically and without consultation.

According to NITI Aayog's 2022 report, India had about 7.7 million gig and platform workers in 2020–21, a number projected to grow to 23.5 million by 2029–30.

In a digital economy where many workers experience “platform dependency” but lack platform power, this new model signals a shift toward participatory control and collective decision-making.

Unlike rural producer cooperatives, which band together to pool inputs or collectively market agricultural products, Bharat taxi is an urban service cooperative operating in the gig economy.

Here driver-members earn income directly from their individual day-to-day rides, instead of through pooled procurement or sales.

Registered under the Multi-State Cooperative Societies Act, 2002, the model also enjoys regulatory clarity and formal oversight, giving it a clear legal framework for pooling capital, enforcing agreed rules and building institutional partnerships.

The biggest concern for gig workers today is not just low income but the volatility and unpredictability of earnings.

Traditional platforms reportedly deduct 20%-30% percent of earned fare in commissions, according to multiple driver associations and independent studies.

Drivers also shoulder all capital and maintenance costs, along with income risk during lean demand cycles. Though not declared, the new taxi service may follow a low-commission or subscription-based model where drivers pay a nominal daily fee instead of a cut on each ride.

If adopted, this approach could meaningfully increase monthly take-home pay while also offering predictability and financial autonomy.

Moreover, being part of a cooperative could eventually allow drivers to access pooled benefits, including insurance, savings instruments and training. These may not materialise overnight, but the institutional design makes them more feasible over time.

Beyond income, drivers get something less tangible but deeply valued – dignity. By being able to vote, they reclaim a sense of agency that is typically absent in the gig economy. The cooperative model enables transparency in how decisions are made, how earnings are distributed and how issues are resolved.

It can also be safely assumed that this model will offer an embedded incentive to improve customer service. When workers own the platform, they are more invested in long-term brand and service quality. This could lead to higher service consistency and better rider experiences without the pressure of algorithmically driven short-term ratings.

The new taxi service is part of a larger vision articulated under the Ministry of Cooperation's Sahkar se Samriddhi initiative.

The idea is not just to revive cooperatives in their traditional sectors but to expand their logic into emerging spaces: digital services, platform-based work and new-age livelihoods.

This initiative fits well within the goals of broadening the base of enterprise ownership, beyond startup founders and institutional investors.

While cooperatives in India have historically faced governance challenges, particularly in sectors such as sugar and textiles, the present context offers new tools for accountability.

Digital platforms allow for greater transparency, automated record-keeping and continuous feedback loops, which can help overcome earlier limitations.

To succeed, the new taxi service will need to balance ambition with execution. While it enjoys strong institutional backing and a robust governance blueprint, practical challenges remain.

The platform will have to ensure that its technology is reliable and user-friendly to attract both drivers and riders. It must also navigate the complexities of customer acquisition in an already crowded mobility market.

Equally important will be providing adequate training and support to member-drivers, particularly in cooperative governance, the use of digital tools and mechanisms for conflict resolution.

Much of this support can be drawn from existing policy frameworks such as digital skilling missions, electric vehicle financing schemes and social protection systems. These aren't prerequisites but amplifiers that can enhance the model's long-term sustainability.

Bharat taxi is more than just a new entrant in the mobility space. It is a live experiment in cooperative digital enterprise, offering a fresh vision of how platforms can be built, owned and governed by those who power them.

With India's cooperative institutions providing both legacy and leadership, Bharat taxi has the potential to become a defining model for platform work where technology can help not only in achieving scale but also fairness, inclusion and shared prosperity.

The initiative also carries important implications beyond India.

In a world grappling with the social costs of algorithmic gig work, this cooperative model presents a viable alternative that balances efficiency with equity.

As governments and city administrations across Europe, Latin America and parts of Africa seek to regulate platform work and improve labor conditions, Bharat taxi offers a replicable blueprint.

Its fusion of cooperative ownership with digital service delivery provides a pathway for reclaiming worker agency without stifling innovation. For policymakers exploring inclusive economic models, this is not just an Indian experiment but a global opportunity worth watching.

Satyendra Pandey is Associate Professor at Institute of Rural Management, Anand, “Tribhuvan” Sahkari University.

Pratik Modi is on lien from Institute of Rural Management Anand (IRMA), currently the Dean and Professor at School of Management, BML Munjal University.

Originally published under Creative Commons by 360info™.

Source: Scroll
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