Karnataka Bans Surge Pricing on Ola and Uber; Maharashtra to Follow
If you have been a victim of surge pricing on the major cab-hailing apps in India, then this will be a good news for you. For Ola and Uber, this might be a bad news considering their major source of income is surge.
Karnataka Government, on 6th April, created and introduced a format set of rules and regulations governing taxi aggregators like Ola and Uber. According to these rules, these companies cannot charge anything extra over the base fares to a customer. The prices will be fixed and will be continued as set by these companies.
Usually during peak hours, the taxi-hailing companies would levy extra charges, 2 to 3 times the base prices, to compensate for low number of drivers available. Such pricing has been digging a huge hole in the pockets of users who need taxis in urgent situations.
Karnataka Government has also laid out rules for compulsory check of driver’s background, accurate GPS tracking in cabs throughout the journey and a panic button always operational in the cab.
Maharashtra’s take on this
Inspired by the Karnataka Government, Maharashtra Government is all set to create a similar set of rules for taxi aggregators
According to a report by Business Standard, a Maharashtra minister said,”’The fare will be decided on the cost of the vehicle and the engine capacity. The transport department will enjoy powers to cancel licences for non-compliance.”
Over and above what Karnataka has set, Maharashtra will also introduce induction schedule for taxis. At the time the license will be granted, only 25% of the fleet can be acquired. Every quarter going forward, 25% more can be acquired and finally complete fleet can be acquired in a year.
This news is actually quite a let down for Uber, and it must be very awkward as well, since Uber signed an agreement with Maharashtra Government to create jobs in the state.
Is removing surge pricing going to benefit the common man?
Monetary restrictions are always good for the commuters, especially those who use the services daily. It is definitely a bad news for Ola and Uber as they will now have to search for other ways to generate that extra source of revenue.
Now that the surge pricing has been removed, it would hit the driver’s wallet directly as well. Drivers would get the share of surge, giving them incentive to drive during odd and peak hours in cities. Imagine you’re working an extra hour or two but still getting a poor compensation for your hard work.
This in turn would result in low number of cars on the streets and hence anger amongst the commuters. Although I agree surge pricing in ridiculous, but there needs to be a way or an incentive to have more fleet on the ground running at odd hours.
Other State Governments are also thinking about implementing these rules to curb surge pricing completely, which could have both positive and negative impacts. Let’s see what people have to say about the new policy in Bengaluru.