Karnataka 1st to curb surge pricing by cab firms

BENGALURU: Cab users can breathe easy. The new guidelines for taxi-hailing aggregators say under no circumstances can they charge more than the maximum prescribed fare. This is the first time that a state government has imposed restrictions on the operations of cab aggregators.

The move could force the aggregators to rework their pricing strategy. The much awaited Karnataka On-demand Transportation Technology aggregators Rules, 2016, came into effect on April 2. The norms cap surge pricing -charging of several times the regular fare during peak hours -and do away with base and ride-time fares. The guidelines were necessitated after aggregators Ola and Uber began operations.

HG Kumar, additional commissioner, State Transport Authority (STA), said: “According to the MV Act, rates are fixed by the government for all aggregators licensed to operate. As per the norms, the maximum per km fare will be Rs 19.50 for AC cabs and Rs 14.50 for non-AC ones. Taxis will not be allowed to charge more during peak hours. But the operators can certainly lower tariff to gain a competitive edge.”

STA is enforcing the new rules under Sub-section 1 of Section 212 of the Motor Vehicles Act, 1988.However, services offered at the lower end of the spectrum, priced between Rs 6 and Rs 13, can be offered at higher rates provided they don't cross Rs 19.50 and Rs 14.50 respectively. The guidelines make it clear there can be no dead mileage charges (when the vehicle is empty for a while after dropping the commuter) in the guise of ride-time charges.

There is no room for minimum fare, which is Rs 50 Rs 100 in the case of many aggregators. However, passengers will have to shell out service tax. The norms make the companies more responsible towards passengers. They mandate that the aggregators check drivers' antecedents via police and not employ someone who has been convicted in the past seven years for driving under the influence of drugs alcohol or under a CrPC section.

GPSGPRS systems are a must. The rules spell out technical specifications of the devices to be used. Control rooms are a must. A system through which a panic button pressed by the passenger can alert police is mandatory. However, the norms are only applicable to aggregators operating cabs, not autorickshaws and two wheelers.