Govt drafting new rules for Ola and Uber, may curb surge pricing at 3X of base fare

Apart from a cap on price hikes, the regulations that will be framed could be in line with those proposed in December 2016.
Govt drafting new rules for Ola and Uber, may curb surge pricing at 3X of base fare
Govt drafting new rules for Ola and Uber, may curb surge pricing at 3X of base fare
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A major issue faced by users of ride-share cab services in India is surge pricing. However, this problem may soon be addressed with the government reportedly working on regulations to cap surge pricing. An Economic Times report states that the Centre may permit cabs to charge customers only up to three times the base fare during peak hours, when demand is high.

Services such as Uber and Ola, bring relatively nascent industries, do not have proper regulations to control their operations. There have been demands from various consumer interest groups to bring in legislation to control the way these services are operated. The government is heeding to this request and is now in the process of drafting guidelines.

The last time some proposals were framed for the app-based cab services operators was in 2016. The present exercise will look at fixing some of the grey areas in the working of these services.

The 2016 guidelines had proposed 4 different type of licenses for taxis and also proposed that the state transport department can issue licenses to aggregators and radio taxi operators, while als giving the state government the power to set minimum and maximum fare.

The recently enacted Motor Vehicles Act has, for the first time, recognized the cab aggregators as digital intermediaries. The to-be-framed guidelines will also permit the states to make necessary modifications while implementing the rules in their respective states. Some states like Karnataka have already issued regulations for the cab aggregators, fixing the minimum and maximum fares that the cab services can charge from their customers. Karnataka has capped the surge pricing at 2 times the regular fare for small cabs.

A survey conducted by LocalCircles has indicated that while some users would want the surge pricing to be not more than 25% of the base fare, 45% of the respondents want it removed completely.

Experts in the field however feel that the authorities in India should learn from some of the major cities in the world like New York and London before formulating guidelines here.

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