Ola, Uber Fares Capped: Govt To Limit Surge Pricing At 3x Base Fare

The practice of increasing fare during peak hours or during high demand by cab-hailing services like Ola and Uber has not gone down well with the Indian judiciary and both the Centre and state governments. As a result, the Central government is likely to introduce a cap on pricing during peak hours.

The Centre is reportedly considering to allow cab aggregators to charge three times the base fare during periods of heavy demand. There are other guidelines that are yet-to-be-framed, which will be in line with proposed regulations by the Central government in December 2016.

The step is also in alignment with the updated motor vehicle law, which now recognises cab-hailing services as digital intermediaries or marketplace. Along with pricing, the new guidelines are also expected to tackle the issue of passenger safety. Earlier in July, the Supreme Court (SC) had asked the Center to come up with such guidelines to ensure women passengers’ safety.

What Was The December 2016 Proposal?

The December 2016 guidelines allowed cab aggregators such as Ola and Uber to charge up to three times the base rice during the day. However, between midnight to 5 AM, this surge price could go up to four times. These regulations were only implemented on cab categorized under “economic taxis”, which were less than four meters in length.

The cabs hailing services were also asked to reveal their minimum fare to the state transportation department for approval. The guidelines included:

• Private vehicles could be used as Taxis after prior permission and paying the required fee
• All India Tourist Permit (AITP) is required by cabs to operate under any such cab aggregator
• Local fuel and other regulatory norms should be followed by these taxis
• Taxis working with the aggregator should have an app-based metering system validated by an IT ministry approved agency.

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.

In April 2016, the Delhi High Court issued a notice to Delhi Government. The HC asked the government to clarify the steps taken to stop taxis aggregators from overcharging or charging fare arbitrarily.

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