‘Cost of app-based riders may shoot up by 40% if Maha Taxi Rules 2017 comes into force’

If the new rule -- Maharashtra City Taxi Rules 2017, were to come into force, the per day cost to consumers is likely to increase by 40 per cent and that of taxi drivers is likely to increase by 93 per cent for app-based aggregators (Ola and Uber). This was stated by a study undertaken by (Consumer Unity & Trust Society) CUTS International.

In 2017, when the rule was announced, the state government was taken to the Bombay High Court (HC) by various app-based aggregators. During one of the hearings, the HC had termed this rule discriminatory and now, this report, shows the impact it will have on all stakeholders. In the report titled, ‘Regulatory Impact Assessment of Maharashtra City Taxi Rules, 2017’, CUTS International has applied the Regulatory

The report suggests average fare for a 30-min, 10km ride in the city for compact hatchback taxi segment is Rs 155 and hatchback taxi segment is Rs 180. Post-implementation of rule, the report estimates that the rider will have to shell out Rs 25 more per ride per day

Impact Assessment (RIA) framework to estimate costs and benefits of select provisions of the rules.

This report suggests that the average fare for a 30-minute, 10km ride in Mumbai for compact hatchback taxi segment is Rs 155 and hatchback taxi segment is Rs 180. Postimplementation of rule, the report estimates that the rider will have to shell out Rs 25 more per ride per day. The report further states that this increase in cost might force the consumer to abandon this convenient mode of transport and move to a more congested way of travelling. Apart from the consumers, this will impact the income of the app-drivers directly or indirectly. All this will result not just in loss of revenue for drivers but app-based drivers will also need to bear significant fixed costs of the car. The report further added that the demand for black-and-yellow (B/Y) taxis may rise, consequently resulting in increase in income of drivers of B/Y taxis. Arpit Tiwari, Assistant Policy Analyst, CUTS International, apprised that all stakeholders (other than the government) are likely to incur high additional costs. While the government is likely to generate minuscule additional revenue, the same might not be its primary objective.