Centre may cap surge pricing on Ola, Uber: Report

The Centre is likely to put a cap on surge pricing for the cab aggregators in the country. A senior government official told The Economic Times that the government would permit cab aggregators to charge customers up to three times the base fare during periods of high demand.

“Like with the December 2016 guidelines, our policy will mention surge pricing and what should be the kind of capping, among other things," the official told the newspaper.

Elaborating on the regulations, the official said that the rules will specify the allowable limit for such price hikes, and the states will have the leeway to make a change. “But they will have to come up with reasoning in case of local variations, which is fine,” the official added.

The Karnataka government is the first state to regulate cab aggregators. The state decided the minimum and maximum fare according to the cost of the vehicles. However, the ideal difference between the minimum and maximum fare is 2.25 per cent for luxury cabs and 2X for small cabs, stated the news report.

While making guidelines, the government will also be looking at safety measures for women passengers and the kind of vehicles to be used by app-based cab aggregators.
The amendment in the Motor Vehicles Law, for the first time, recognises cab aggregators as digital intermediaries or marketplaces. Earlier, the law did not recognise cab aggregators as separate entities.

What was the December 2016 proposal?

The December 2016 proposal allowed the cab aggregators to charge up to three times the base price during the day, and between midnight and 5 am, the surge price could be four times more. These regulations were made for the cabs categorised under 'economic taxis', which was less than four metres in length