Limit On Ola, Uber Surge Tariff Means Less Earning For 5 Lakh Drivers; Passengers Will Suffer Too!

• Guidelines directed towards granting license to aggregators and ensuring the wellbeing of drivers and safety of passengers.

The Ministry of Road Transport and Highways issued some new guidelines for cab aggregators, on Friday 27 November. These guidelines are created as a skeleton for the state governments to regulate the licence work done by transport aggregators.

What Are The Exact Guidelines?

The Motor Vehicle Aggregator Guidelines aims to resolve matters like criteria for qualifying a company as an aggregator and compliance related to the entities owned by aggregators like vehicles, apps and websites. According to this, aggregators will have to make sure that they use only Indian servers to save the data generated on their app for at least 3 to 24 months from the day the data was generated. It also mentioned that any customer data cant be revealed without a written consent of the user.

To ensure the wellbeing of the drivers, the guidelines mention caps surge pricing at 1.5 times the base fare and specifies that drivers will receive at least 80% of the fare with the rest going to aggregators.

The guidelines suggest a ‘pool only with women option’ for female passengers to guarantee their safety. In case of cancellation, without a valid reason, of a ride that has been already accepted, both driver and rider will be charged a penalty of 10% (not exceeding ?100).

What Is The Need Of These Guidelines?

Before the revision of the guidelines, the Ministry of Road Transport and Highways had no defined regulation for aggregators. Aggregators are considered to have been defined as a digital intermediary between passenger and driver for the sake of transportation.

According to the MOtor Vehicle (Amendment) Act 2019, a license issued by the state government is a mandatory prerequisite for a business to qualify as an aggregator. Hence through these guidelines the government wishes to regulate the transport businesses and ensure that they are “accountable and responsible for the operations executed by them”, 

What Are The Reactions Towards The Guidelines

RedSeer Associate Partner Consumer Internet, Ujjwal Chaudhry, feels that these guidelines  will have both negative and positive impact on the mobility industry.

“It is positive in terms of formalising the sector as well as increasing the consumers. However, overall, the impact of these guidelines on the ecosystem growth are negative as capping surge and platform fee will ultimately lead to reduced earnings for 5 lakh drivers (currently on these platforms)”  Chaudhry stated.

He also added that the guidelines will also lead to increased prices and higher wait times for the 6-8 crore consumers who use it for their mobility and commute needs.

For the customers, the amendments might lead to costly cabs ordered from applications like Ola and Uber.