The government on Friday proposed to cap surge pricing charged by cab aggregators like Ola and Uber at 1.5 occasions of the base fare.
The improvement assumes significance in the backdrop of a lengthy-pending demand of citizens to cap the pricing of ride-hailing solutions.
“The aggregator shall be permitted to charge a fare 50 per cent lower than the base fare and a maximum surge pricing of 1.5 times the base fare,” stated the Motor Vehicle Aggregators Guidelines, 2020 issued by the Ministry of Road Transport and Highways.
This will allow and market asset utilisation which has been the basic idea of transport aggregation and also substantiate the dynamic pricing principle which is pertinent in making sure asset utilisation in accordance with the marketplace forces of demand and provide, the ministry stated.
The driver of a car integrated with the aggregator shall get at least 80 per cent of the fare applicable on every single ride and the remaining charges for every single ride shall be received by the aggregator.
In states exactly where the city taxi fare has not been determined by the state government, an quantity of Rs 25/30 shall be the base fare for the objective of fare regulation, the suggestions stated.
Similar fare fixation shall be accomplished by the state government of other automobiles integrated by aggregators with the relevant state, the ministry stated.
Research firm RedSeer stated that the suggestions for cab aggregators which seek to cap surge pricing at 1.5X amongst other provisions are anticipated to have mixed effect for the sector that will advantage from enhanced security regulations but could have “negative” fallouts for drivers’ earnings.