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Wednesday 29 January 2020

Ola, Uber price surge: New rules may cap at 3X base fare

The proposed rules for Ola, Uber follows the new MVA, which now recognises cab aggregators as digital intermediaries or marketplaces

New Delhi: The government may soon permit the cab aggregators to charge the customers up to three times during high demand periods, report said. According to the new regulations drafted for the industry, there will be a specified allowable limit for the cab aggregators like Ola and Uber can surge prices.

“Surge pricing is intrinsic to the demand and supply situation (of cab aggregators)”, an official in the know said. “Like with the December 2016 guidelines, our policy will mention surge pricing and what should be the kind of capping, among other things.”

The proposed rules for cab aggregators follows the new motor vehicle law, which for the first time recognises cab aggregators as digital intermediaries or marketplaces. Earlier, the rules did not recognise cab aggregators as separate entities, causing firms such as Uber and Ola to operate in a grey zone.

Karnataka, which happens to be the first state to regulate cab aggregators, has a minimum and a maximum fare for app-based cab companies, with slabs based on the cost of the vehicle. However, the maximum variance between the minimum and maximum fare is 2.25% for luxury cabs.

Recently, Union Transport Minister  on 11 September defended the statement made by Finance Minister  on the slowdown in the  sector. Nitin Gadkari, defending her, said at an event that Sitharaman’s statement was misunderstood.

Earlier,  had said on Tuesday that the new generation preferred to use services like Ola and Uber instead of paying EMIs for new cars.

The transport minister said, “There have been many reasons for the continuous decline in the automobile industry in the last few months. For example, the growth in sales of e-rickshaws has led to lower sales of general auto-rickshaws.” Apart from this, the minister said that the improvement in public transport across the country had been a reason for the slowdown.

The automobile sector had sought help from the central government to overcome the recession in recent times. The automobile industry demands that GST be reduced from 28% to 18%. On this, Gadkari said that any decision on GST would be taken by the GST Council.

The transport minister said, “I am confident that Sitharaman ji will talk to the states to reduce GST. The ball is in the court of the Finance Ministry.” Earlier, Nirmala Sitharaman had declined to comment on a question on GST at the conference yesterday. She just said that she alone could not decide on GST.

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