Karnataka Might Ban Surge Pricing Of Ola & Uber

To level the competition between all cab operators in the state, Karnataka has sought to put an end to the collection of surge-price from customers, a practice by cab hailing apps such as Uber and Ola.

Surge Pricing refers to an automatic increase in rates when the taxi demand is higher than the available fleet or drivers.

The regular cab-permit holders follow a fare chart which is notified by the transport department. According to this chart, passengers are charged 1.5 times of the regular fare between 11 PM and 5 AM.

For the technology-based service providers different state follow different policies. In Karnataka, the draft under on-demand transportation technology aggregators rules-2016, “The fare including any other charges, if any, shall not be higher than the fare fixed by the government from time to time.”

In another significant step, Karnataka government has raised a question of licensing for app-based taxi services. To which cab aggregators have everytime responded by saying that  they are technology companies engaged in facilitating a taxi-hire, and are not in the business of running taxi services. However, the state does not agree with the claims and has demanded the requirement of a license every now and then, which shows that the government wants to treat the aggregators in the same way as the other conventional cab operators.

EV Ramana Reddy, principal secretary, Karnataka transport department, told ET, “These are all a set of proposals we have placed in the public domain. The government will take a final view and notify the policy only after examining the views, suggestions and objections, if any, from all stakeholders.”

Some of the rules suggested are as follows:

• To function, app-based aggregators will have to comply with having a minimum of 100 taxis, either owned or operated under an arrangement with individual permit holders.
• Aggregators will need to operate a control room and ensure cabs have tamper-proof GPS and a panic button
• The cabs should have electronic digital fare meters capable of generating a printed receipt in case the app is unable to send the fare details through an SMS or email to the customer.
• A cab driver must be a resident of Karnataka for at least five years
• The driver should be able to speak Kannada, and one another language, preferably English.

The draft rules seek to allow a cab driver to switch between aggregators according to his choice.

Apart from Uber and Ola, Meru, Megha, Bangalore Taxi, KSTDC, CarzOnRent and Spot Taxi currently operate as ride-hailing services in the state.

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