New rules will make your cab ride expensive

New rules will make your cab ride expensive

The days when you rode home on Ola and Uber at Rs 6 per km are now over

The peak-hour cab rides will become expensive from Thursday with the transport department allowing a surcharge with a ceiling and setting a limit for lower fares, which will restrict discounts from aggregators like Ola and Uber.

Earlier, the department had set a maximum fare of Rs 14.50/km for non-AC hatchbacks and Rs 19.50/km for sedans.

This had led to unrestricted competition by aggregators who offered discounts on rides to draw more commuters.

The latest rule replaces it with a detailed fare structure that prescribes both minimum and maximum fares for cars classified into four categories based on their prices.

"For the first time, we have fixed minimum fare to put an end to the unhealthy competition. Big companies would offer rides at throwaway prices to hurt traditional taxi drivers and operators. First, the rate of the discounts will come down, the number of discounts will also fall," a senior official said.

The rule now stipulates that fares cannot go below Rs 11, the minimum fare in the cheapest cars.

As per the fare chart, taxis priced below Rs 5 lakh fall in 'D', the last category, will now charge Rs 44 for the first 4 km after which the fare per kilometre should be anything between Rs 11 and 22.

However, most of the cars on online aggregator platforms charge above Rs 5, considering their on-road price, which includes taxes and insurance.

These cars priced between Rs 5 lakh and 10 lakh fall in 'C' category with a base fare of Rs 52. Subsequently, the fare will be Rs 12/km at the minimum and can go up to Rs 24/km.

The fares for the cars priced at Rs 10 lakh-16 lakh and those above Rs 16 lakh, will impact those who choose large sedans for family rides and the few opting for luxury cars.

What's the impact?

At first look, the new fare structure seems to be streamlining the fares rather than allowing a hike.

However, the introduction of minimum fares means operators or aggregators have to pay the prescribed amount to the drivers.

Two drivers working with cab aggregators said they earn as less as Rs 8/km at present, though the cars they drive cost about Rs 7 lakh.

Under the new rule, they will earn an additional Rs 4, which the aggregators will soon pass on to customers.

Online aggregators welcomed the move with Uber stating that the revised fare will help drivers by improving their earning potential.

"While it is a step in the right direction, we believe dynamic pricing will help increase reliability for riders and improve asset utilisation for driver partners," said Christian Freese, GM-South, Uber India.

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