In what could be a piece of good news for lakhs of people across the country, Ola and Uber rides are going to get cheaper as the central government has chose to cap surge pricing charged by cab aggregators at 1.5 times of the base fare. This has been done to enable and promote asset utilisation, which has been the fundamental concept of transport aggregation, and also to substantiate the dynamic pricing principle, which is pertinent in ensuring asset utilisation, in accordance with the market forces of demand and supply.
Indian ride-hailing aggregator businesses have hit a speed bump with the Indian government's fresh motor vehicle aggregator guidelines.
The guidelines, issued by the ministry, also mandates that no aggregator will be able to do business unless granted a licence by the state government.
The city taxi fare indexed by the WPI for the current year shall be the base fare chargeable to customers availing aggregator service. On the other hand, aggregators are allowed to charge fares that are up to 50 percent lower than the base fare.
The guidelines touch upon issues like eligibility conditions/qualifications for an entity to be an aggregator, compliances with regard to vehicles and drivers, compliances with regard to aggregator app and website, manner of fare regulation, and drivers welfare and ensuring safety of riders.
States can suspend the aggregator's licence if there is "systemic failure" to ensure the safety of the rider and driver, repeated financial inconsistencies on fares, the unjustified imposition of surge pricing and "severity of financial swindling", among others. Cancellation of ride by the driver after accepting the ride request on the app and customer after booking the request will attract a penalty of 10 per cent of the total fare not exceeding Rs 100, the rules noted.
"If a consumer can have a high degree of certainty that the drivers won't cancel their ride last minute and they will never pay more than amount X for a ride, they are bound to use the services more", said Taparia.
A driver should have two years experience and if he does not, the aggregator must provide 15-day training.
The aggregator will also have to adhere to safety protocols like ensuring that the Global Positioning System installed in the vehicle is functioning appropriately, the driver is plying the vehicle on the route assigned on the app and ensuring safety of women employees, among others. There has to be a mandatory 10-hour break after working for 12 hours. However, customer data will not be disclosed without the written consent of the user. Cab aggregators are also required to establish a control room with round-the-clock operations.
Parliament amended the Motor Vehicles Act in 2019 to carve out "aggregators", a new category of digital intermediaries or marketplaces, which passengers can use to connect with a driver. The drivers, who were also demanding free housing from the state government, also sought implementation of a minimum fixed price and taxi metres, and cutting down on excessive commission charged by cab aggregators. Rationale for such prohibition shall be specified in writing and made accessible on the transport portal of the state government.
As ET reports, the guideline permits a maximum of four intra-city ride-sharing trips on a single day and a maximum of 2 inter-city ride-sharing trips per week for vehicles integrated with aggregator apps.