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Government Issues New Guidelines; Enables Surge Pricing For Uber, Ola

Government Issues New Guidelines; Enables Surge Pricing For Uber, Ola

The Central Government has reportedly issued new guidelines governing taxi operators across the country.

Cab aggregators like Ola and Uber have now got the liberty to charge up to three times the minimum fare during the day and up to four times between midnight and 5 am. Also, they have been asked to submit a ‘minimum fare’ to state transport department for approval.

Notably, the price regulations have only been prescribed for vehicles that are less than four metres in length, which have been categorised as “economy taxi”.

Furthermore, as per the guidelines:

  • Private vehicles can now be used as Taxis only after taking permission online and paying the required fees.
  • Cabs with an All India Tourist Permit (AITP) will be allowed to operate under the aggregators.
  • Cabs with AITP can be engaged by BPOs, IT companies, government departments and PSUs for long-term hiring.
  • All taxis will have to comply with local fuel and other regulatory norms
  • All taxis should have an app-based metering system that must be validated by an agency approved by the IT ministry.

The Government started intervening in the operations of cab aggregators in July 2016, when the Karnataka Transport Department issued a notice to Ola, for breaking the rules after obtaining its license in the state. Also, the Delhi Autorickshaw Sangh and Delhi Pradesh Taxi Union called for an indefinite strike against app-based taxi services in New Delhi.

Following that, 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 future.

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

Following that, the Delhi High Court issued a notice to Ola and Uber to stop surge pricing and follow government prescribed fares. It had set August 22 as the deadline for app-based cab aggregators to completely withdraw surge pricing.

Earlier this month, the Road, Transport, and Highways Minister Nitin Gadkari assured taxi aggregators that the government is working towards simplifying their problems. He added that cab aggregators should also find a way to integrate traditional black-and-yellow cabs within the purview of their operations.

The development was first reported by ET.

Author

Meha Agarwal

Inc42 Staff

Meha has engineering and MBA degrees, but she has always been a writer at heart. It was the perfect combination of utilising her research and analytical skills and her enthusiasm for writing that sparked her interest in writing about the Indian startup ecosystem – the latest tech and gadgets and the startups that create them. She is always on the lookout for industry-specific stories in niche areas of interest such as ecommerce, fintech, greentech and more.

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