Ola, Uber Unhappy Over 5% Convenience Fee, GST Levied On Auto Rides

Ola Uber Drivers and Owners’ Association (OUDOA) and auto drivers working along with ride-hailing companies – Ola and Uber are worried about the Karnataka government’s decision of imposing 5% convenience fee and GST on every auto ride that is booked from them.

On November 25th, the state government directed regional transport authorities to levy convenience fees and GST on auto rides booked by passengers through ride-hailing apps, reported PTI.

The development comes almost a month after the state government disallowed ride-hailing apps to offer auto services in Bengaluru city after customers complained on over-charging issues. 

Post this, the state government and ride-hailing apps were directed to hold discussions and meanwhile, the Karnataka high court passed an interim order allowing ride-hailing companies to continue their services.

Speaking on the state government’s recent decision, OUDOA’s president Tanveer Pasha said “The government should have brought an amendment to the Karnataka On-Demand Transportation Technology Aggregators’ Rules because there is no provision for autorickshaw in it.” 

Pasha further criticised the state government for misrepresenting the case in Karnataka High Court. He alleged that the state transport department did not consider the views of Bengaluru’s regional transport authority while passing the order.

Explaining the auto fares, a passenger is charged INR 15 per km for an auto ride. After imposing a 5% convenience fee along with GST on per kilometre ride, a passenger would have to pay an additional INR 80 paise. 

Pasha showed concern over the issue and said that ride-hailing companies would find other ways to charge extra from passengers. 

At present, the state government has set a minimum auto fare of INR 30 and the per kilometer auto fare is above INR 15. 

A PTI report quoted an auto driver named Thimmappa saying, “These Ola-Uber companies were charging exorbitantly due to which the government had to intervene. We don’t know how they will use this latest order to burn a hole in the pockets.” 

Prior to this, the regulatory body Competition Commission of India (CCI) asked ride-hailing companies to take measures to address inflated pricing issues. It further directed ride-hailing apps to create a clear and transparent policy explaining the revenue sharing model that they have with the drivers on inflated pricing.

According to a ReportLinker report, India’s online taxi services industry was pegged at INR 30.72 Bn in the financial year (FY20). The industry is expected to grow to INR 55.15 Bn by FY25, growing at a CAGR of about 12.93% during the FY21-25 period.