The Karnataka High Court dismissed the writ petitions brought by ride-hailing businesses on Monday, which challenged the state’s 5% service charge cap.
Karnataka High Court Dismisses Petitions By Ride Hailing Businesses
These petitions contested the state government’s announcement that it would be raising the service charge for auto rickshaw trips for firms such as Uber, Ola, and Rapido.
The court made it clear that aggregators would have the right to receive a 5% service charge in accordance with the notification, according to a Bar and Bench report.
The court judgment declared that although the writ petitions are rejected, aggregators are still allowed to keep the 5% service charge that is added to the fixed rate.
The ruling, according to Karnataka’s transport minister R Ramalinga Reddy, will help thousands of Bengaluru residents who depend on cars for their daily transportation.
In November 2022, the Karnataka Transport Department set a 5% service charge cap with applicable GST on the basic fare for app-based auto rickshaw bookings.
Uber, Ola, Rapido Object To New Rule
Uber, Ola, and Rapido are among the ride-hailing companies that had objected to the change.
These companies said that motor vehicle aggregator standards allow them to impose a surge price of up to double the base ticket in addition to a 20% commission.
The notice was stayed by the Karnataka High Court in January 2023.
The ride-hailing companies were allowed to operate for a limited time, with a 10% convenience fee.
The transport department of Karnataka set a 5% cap on the service charge for journeys in auto rickshaws.
The state government’s announcement of service costs was upheld by the court order.
The aggregators can collect the 5% service charge in accordance with the upheld notification, the court clarified.
The transport minister for Karnataka hailed the ruling as good news for Bengaluru residents.
The goal of the service charge cap was to control costs associated with booking auto rickshaws using apps. In their argument, the ride-hailing companies highlighted regulations permitting a larger commission and spike pricing.
In January 2023, the Karnataka High Court first gave these businesses permission to charge a temporary 10% convenience fee. The ruling upholding the service charge cap clarified the maximum amount that ride-hailing companies might charge.
The verdict was perceived as a step in the right direction for Bengaluru commuters who depend on auto rickshaws on a daily basis.
