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Ola, Uber may soon be able to charge up to 4x surge price in India


21 Jun 2013
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New norms by the Centre now allow cab aggregators to charge up to three times the minimum fare during the day, and up to four times between midnight and 5:00AM. The minimum fares that these aggregators plan, however, will have to be submitted to the state transport departments for approval.

The move is a tad surprising, since it goes against what the government is promising for a long time. Earlier this year, the Delhi HC had banned surge pricing in NCR, and even down South, the Karnataka state government put a stop to this practice. The government had long been looking at defining a maximum cap to monitor surge pricing for cab aggregators such as Uber and Ola, especially, in the economy taxi segment to protect consumer interest. “We do not want to get into the auto fare meter concept. If fares are too high, market forces will take over. But we cannot allow unlimited surge pricing and will define a maximum cap for the same. It will help in protecting consumer interest in the economy taxi segment”, a senior official of the road ministry told Economic Times.

It is worth noting that this new price regulation is only applicable to the economic segment of cabs offered by these aggregators. The guideline only covers vehicles that are less than four meters in length. Also, all these taxis under these aggregator are bound to comply with local fuel and other regulatory norms. They are also mandated to have an app-based metering system that must be validated by an agency approved by the IT ministry.

Needless to say, citizens are not too pleased with the move, and have taken to social media to vent their frustrations.

In addition to the surge fares, the guideline has also allowed private vehicles to be used as taxis by paying the required fees and getting their permissions online. This would work well in favor of the Uber, ToI reports. The aggregator had long been testing the UberCommute feature for its app, which is essentially a carpooling feature but for private cars. So if I am driving down in one direction, and I register myself has a UberCommute member, then in Uber’s radar if there is someone who wants to go in the same direction can pool-in in my private vehicle. This way, my commute expense, which I would otherwise of course bare by myself, now gets split between two or more people.

Uber had long been fighting for this rule to be passed. Uber India wanted to be allowed to incentivize people to use their cars on the cab aggregator’s platform to share rides with others, an option which had been prohibited by the Motor Vehicles Act up until now.
Additionally, the new guideline now also permits cabs with an All India Tourist Permit (AITP) to operate under the aggregators. Such vehicles can also be engaged by BPOs, IT companies, government departments and PSUs for long-term hiring.

Ola, Uber may soon be able to charge up to 4x surge price in India
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