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Ola, Uber Face Dress Down as High Court Puts Stop To Surge Pricing

Ola, Uber Face Dress Down as High Court Puts Stop To Surge Pricing

The Delhi High Court on Thursday set August 22 as the deadline, for app-based cab aggregators to completely withdraw surge pricing.

Following this judgment, players in the space like Ola and Uber and other taxi operators will not be allowed to charge passengers more than the government-fixed rates.

The deadline was fixed after Uber told Justice Manmohan that it needs 10 days to make changes to its software. Ola told the court it has already stopped charging passengers more than the notified rates.

According to Delhi Government’s Transport website the taxi fares for Yellow and Black Taxi (kaali peeli) cabs are: INR 25/- for first kilometre (upon downing the meter) and thereafter INR 14 per km for Non-AC taxis, and INR 16 per km for AC taxis for every additional kilometre. The notified fare of Radio Taxi cabs is INR 20 per km. Additional night charge (25% of the fare) is applicable between 11pm and 5am.

So, if a Ola Mini (INR 8 per km) or a Uber Go (INR 7 per km), works on a 2X peak price, then it will be in the same fare bracket as specified by the government and far less than the Radio Taxi fareUber, Ola Face Dress Down as High Court Puts Stop To Surge Pricing.

While addressing the issue of surge pricing, the court asked that “a uniform policy must be devised” for regulating app-based taxis. To facilitate the same it directed a special committee, set up by the Centre to examine all issues related to existing permits given to taxis and cab aggregators. The committee will include one senior official each from the Ministry of IT, Central Pollution Control Board and Delhi Traffic Police. The committee will get three months to submit its report.

Cab aggregators have faced massive criticism from State governments lately. In July, the Karnataka Transport Department issued a notice to Ola, for flouting the rules after obtaining its license in the state. Both Uber and Ola registered themselves with the Karnataka On Demand Transportation Technology Aggregators Rule, 2016. While, Ola received the license, Uber didn’t.

Last month, the Delhi Autorickshaw Sangh and Delhi Pradesh Taxi Union called for an indefinite strike against app-based taxi services in New Delhi. Just yesterday reports surfaced that the Delhi government is planning to impose a fare restriction on app-based cab aggregators including Ola and Uber. They will be barred from charging tariffs over an upper ceiling set by the Aam Aadmi Party government in Delhi in the near future.

Relaxing its ban on Ola and Uber with “immediate effect”, the Madhya Pradesh government gave the two cab companies a breather by serving them a notice to comply with the state transport guidelines in a month’s time. Madhya Pradesh transport department had banned the services of Ola and Uber in the state on Tuesday. The ban was imposed because The Motor Vehicle Act doesn’t have any provision regarding peak time charge.

The initial development was reported by ET.

Author

Aparna Mishra

Inc42 Staff

After a 2-year-stint at Ernst & Young, Aparna moved to Journalism. Her prior experience enables her to understand business management. An avid reader and a traveller she hopes to gain insights on the startup ecosystem at Inc42.

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