K’taka Nixes Surge Pric­ing by App-based Cabs

New pol­icy for IT-en­abled taxi-hail­ing apps set to cap fares, help in sup­ply of cabs

The Economic Times - - Diruption: - KR.Bala­sub­ra­manyam@ times­group.com

Ben­galuru: Kar­nataka has stood firm on not al­low­ing surge pric­ing for app-based ride hail­ing ser­vices such as Ola and Uber in its new pol­icy for the tech-en­abled taxi ag­gre­ga­tors, turn­ing down a ma­jor de­mand from them. The fare and other charges, the pol­icy says, can­not be higher than the fare fixed by the gov­ern­ment from time to time. Which means the app firms must charge a fare within a band the up­per limit of which is capped.

“We have not al­lowed the surge pric­ing be­cause the pur­pose of us­ing the tech­nol­ogy is to in­crease ser­vice stan­dards for cab users at com­pet­i­tive fares. We have fo­cussed this pol­icy around this, and given a lot of im­por­tance to safety as­pects,” Trans­port Min­is­ter Ra­ma­linga Reddy told ET.

In a set of con­ces­sions aimed at in­creas­ing the sup­ply of cabs so that fares are un­der check, the gov­ern­ment has dropped the age re­stric­tions it had pro­posed for ve­hi­cles to qual­ify as taxis. The gov­ern­ment had pro­posed that only cabs that are less than two year old could en­ter the app-based ride hail­ing seg­ment and they could stay in ser­vice un­til the age of six. Any­one with a valid li­cence and liv­ing in Kar­nataka for two years can drive a cab for an app ser­vice. The gov­ern­ment had ear­lier pro­posed five years, and this small relief might in­crease the num­ber of driv­ers avail­able to app-based ag­gre­ga­tors. The gov­ern­ment has al­lowed taxi per­mit hold­ers to switch be­tween ride hail­ing apps as per his choice. This piece of reg­u­la­tion may in­crease the com­pe­ti­tion among the app firms to re­tain cabs un­der their fold with more lollipops to driv­ers/per­mit hold­ers. “We came to know that app-based firms were forc­ing driv­ers (per­mit holder) to work only for them. We have, how­ever, recog­nised a driver’s free­dom to choose the app he wants to as­so­ci­ate with,” the Trans­port Min­is­ter said.

Re­spond­ing pos­i­tively to the con­cerns ex­pressed by Uber, the gov­ern­ment has slashed by half the li­cense fee and the se­cu­rity de­posit payable by ride hail­ing ser­vices. The app firms will now pay a se­cu­rity de­posit of .₹ 1 lakh for a fleet of up to 1000 taxis, .₹ 2.5 lakh for up to 10,000 taxis and Rs 5 lakh for more than 10,000 taxis. In the same way, the fee for grant of ag­gre­ga­tor li­cence is halved to Rs 50,000, and like­wise, the fee for other ser­vices too have been cut.

Uber is said to have tied up with 30,000 plus cabs in Ben­galuru, and pos­si­bly for this rea­son, it has not been in favour of a se­cu­rity de­posit. It had ob­jected to the de­posit in­sist­ing that it is only a fa­cil­i­ta­tor of the ser­vice, and not an op­er­a­tor. While fix­ing re­spon­si­bil­ity on both the ag­gre­ga­tor and the cab driver for any vi­o­la­tion of the per­mit con­di­tion, the gov­ern­ment has laid down in its pol­icy that if any un­to­ward in­ci­dent were to oc­cur dur­ing the course of a ride, “the li­censee (ag­gre­ga­tor) should in­form the same to the li­cens­ing au­thor­ity (Trans­port depart­ment) as well as to the ju­ris­dic­tional police im­me­di­ately.” The pol­icy also con­tin­ues with the re­quire­ment of a panic but­ton inside cabs which pas­sen­gers can use in the event of a cri­sis to reach the con­trol room.

Uber, Ola, Meru, Mega, Ban­ga­lore Taxi, KSTDC, Car­zOn­Rent, and Spot Taxi, cur­rently op­er­ate as ride-hail­ing ser­vice in Kar­nataka un­der a li­cence ob­tained un­der the Ra­dio Taxi Scheme, 1988. None of them has com­mented yet on the new pol­icy.


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