Ola, Uber Surge Price: Govt May Set Limit For Charge At Three Times The Base Fare, Says Report

Government may soon set a limit to surge pricing during high demand periods, according to a report. However, this may not reduce the burden too much on you pocket, as the cab aggregators may well be permited to charge the customers up to three times in peak hours, the Economic Times report said.

The report quoting senior government official aware of the deliberations said that a new set of regulations are being drafted for the industry. The report said that the new regulations will specify the allowable limit for such price hikes and other guidlines for the cab aggregators like Ola and Uber.

Uber and Ola have long argued in favour of surge pricing to regulate the demand and supply of cabs on their platforms.

The proposed rules for cab aggregators follows the new motor vehicle law, which for the first time recognises cab aggregators as digital intermediaries or marketplaces.

Earlier, the rules did not recognise cab aggregators as separate entities, causing firms such as Uber and Ola to operate in a grey zone.
The proposed guidelines will also address the issues of passenger security, types of vehicles allowed and liability responsibility as provided in the new motor vehicle act. Supreme Court in July had asked the central government to draft a new law to regulate mobile app-based taxi service providers and address safety issues, particularly for women riders.

According to the report, while the new rules will apply to cab aggregators across the country, states will have the leeway to make changes.

HIGHLIGHTS

• Uber, Ola and other ride-hailing apps have long argued in favour of surge pricing
• Cab aggregators could be allowed to charge three times the base fare
• New rules will recognise cab aggregators as digital intermediaries or marketplaces