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Regulations On Uber, Ola Under Scanner For Surge Pricing

Regulations On Uber, Ola Under Scanner For Surge Pricing

The government has decided to revisit the policy on regulations for cab aggregators

Transport Ministry has been asked to call for wider stakeholder consultations

The new guidelines include capping the surge pricing to 3 times the base fare

After cab-hailing gets into the ambit of Motor Vehicles Act, the transport ministry is finalising guidelines and now looking for final consultations.

An ET report citing officials said that the government has decided to revisit the policy on regulations for cab aggregators like Ola and Uber for a “wider stakeholder consultation” before finalising it.

The transport ministry has been indicated to spend more time on the policy and get more consultations. The new regulations will be a slight modification to the Motor Vehicles (Amendment) Act, 2019, which was passed in 2019.

The act defines taxi aggregators as the intermediaries or marketplaces for transportation. It does not recognise app-based cab services as a separate entity from transport solutions. Through the amended motor vehicles act, the government is looking to ensure:

  • Women and passengers safety
  • Well-trained driver-partners
  • Higher penalty for violating licensing conditions (INR 25K-INR 1 Lakh)
  • A cap on surge price
  • Uniform guidelines for cab aggregators
  • Clear ownership of cabs for accidents and other liabilities

The government rolled out the guidelines after the Supreme Court laid stress on the matters of women’s safety travelling in the cabs. The central government had noted that since transportation was a state domain, the guidelines were not uniform across the country. Customers and driver-partners have already been raising concerns regarding the policies of the cab-hailing services.

In September 2019, Ashwani Mahajan, co-convenor of RSS affiliate Swadeshi Jagran Manch (SJM), wrote to various union ministers — Nitin Gadkari, Nirmala Sitharaman and Narendra Modi — highlighting the surge pricing issues faced by the customers.

According to guidelines issued in December 2016, cab aggregators Ola and Uber were allowed to charge up to three times the base price during the day. However, between midnight to 5 AM, this surge price could go up to four times. However, there’s a feeling that these regulations are outdated considering how far the cab-hailing sector has come from 2016.

Till now, many state governments such as Delhi, Karnataka, West Bengal and Madhya Pradesh have taken actions against these cab aggregators by updating policies and guidelines. Even Delhi High Court (HC) has played an active role in this regard.

The Central government is now considering updating these guidelines to fall in line with the new motor vehicle law, which now recognises cab-hailing services as digital intermediaries or marketplace. Along with capping the surge pricing to three times the base fare, the new guidelines are also expected to tackle the issue of passenger safety as well.