Karnataka HC dismisses cab aggregators’ petition challenging service charge cap

The state government allowed a 5% increase over the base fare fixed in November 2021. The petitioners contended that the guidelines issued by the central government provide for 20% of the amount collected from the rider as service fee.

The Karnataka High Court on Monday dismissed the petitions filed by cab aggregators Ola and Uber, challenging the transport department’s November 25, 2022, notification capping their service charge.

Justice Suraj Govindaraj also said that the aggregators would be entitled to collect 5 per cent service charge as per the notification.

"The writ petitions stand dismissed. It is, however, made clear that the aggregators would be entitled to collect 5 per cent service charges as per the impugned notification now upheld over and above the fare fixed,” Justice Govindaraj said. The order copy is yet to be released.

The state government allowed a 5 per cent increase over the base fare fixed in November 2021. The petitioners contended that the guidelines issued by the central government provide for 20 per cent of the amount collected from the rider as service fee.

As aggregators, they claimed they are neither permit holders nor owners, but only intermediaries and are not involved in providing transportation services. It was contended that the service fee charged by the aggregators does not come within the meaning of fare and hence, the state does not get competence or authority under the rules to prescribe or regulate the amounts.

On the other hand, the state government claimed that the service of the petitioners is akin to contract carriage services and hence, it has the power to regulate the same in public interest.