Cabs surge price to be capped at 3x base fare: Report

Cabs surge price to be capped at 3x base fare: Report

As per new taxi regulations, the surge pricing for cab aggregators may be capped at thrice the base price at certain hours of the day.

The government may soon permit the cab aggregators to charge the customers up to three times during high demand periods and retain their commission at about 20%, The Economic Times reported.

“On the issue of surge pricing, it is likely to be capped at thrice the base price but it has to be decided at what hours of the day it will apply,” a government official aware of the development told The Economic Times.

The new rules are based on the taxi policy guidelines prepared by a committee that was accepted and issued by the Ministry of Road Transport and Highways in 2016. The panel had recommended that range-bound dynamic pricing be allowed to effectively match demand and supply. The proposed rules for cab aggregators also follow 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.

“It is felt that the maximum tariff may be permitted up to three times the minimum tariff. To increase the availability of taxis during the night time, the committee recommends that maximum tariff may be allowed up to four times that of minimum tariff from midnight to 5 am,” the committee told the Economic Times.

Karnataka is the first state to regulate cab aggregators and has set a minimum and a maximum fare for app-based cab companies, with slabs based on the cost of the vehicle. However, according to their regulations, the maximum variance between the minimum and maximum fare is 2.25 per cent for luxury cabs.