Launching state's own ride-hailing app not feasible: Karnataka transport commissioner

Both Uber and Ola are currently facing the ire of customers in India for random surge pricing. (Image source: Reuters/Representative)

Amid the ongoing debate over commission charges and licences of app-based auto aggregators Ola, Uber and Rapido, the Karnataka transport commissioner on November 15 said that developing a new ride-hailing app by the state will be time-consuming and difficult.

“We have taken all the recommendations from various stakeholders and will be duly submitting the same to the Hon’ble High Court…at this point, developing a new app is not feasible and is time-consuming,” said SN Siddaramappa during a meeting held on Tuesday where various stakeholders submitted their recommendations and suggestions.

“It will take its own course and until then, we will have to work within the framework of the constitution. However, we will make efforts to bring justice to the public in this direction by taking in inputs from all the stakeholders of the issue," he added.

The newly appointed transport commissioner Siddaramappa’s words came as a response to Bengaluru residents' and auto drivers' request to the government to develop a state-run app and decide on the fares.

“Uber, Ola and Rapido are not something the government has introduced. We are in a liberalised world and everybody has opportunities to invest in any business. Initially, ride-hailing apps were welcomed by passengers as it was a doorstep pick-up,” the commissioner said.

“However, the conflict started when auto fares of these ride-hailing apps soared. As per the directions from the Karnataka High Court, we convened meetings and have taken inputs from all the stakeholders including the auto driver unions, representatives of the ride-hailing companies, the general public, and mobility experts, after which we will file an affidavit and submit it in the Karnataka High Court,” he added.

The meeting was convened by the State’s Transport Department post orders from the Karnataka High Court on November 7 to hear the pain points and suggestions from various stakeholders including residents, industry experts, activists, and auto drivers and their unions of the ride-hailing apps Ola, Uber and Rapido.

“While convenience fee at a fair pricing can be allowed, we are very much against the surge pricing and increased cancellations by drivers of Ola, Uber and Rapido,” said a resident of Yeshwantpur during the meeting.

Residents, including senior citizens, submitted suggestions to add shared mobility by Ola, Uber and Rapido to help last-mile connectivity at a reasonable price.

Talking at the meeting, an independent mobility expert said that there needs to be uniformity between the State and central government’s Motor Vehicle Aggregator Guidelines.

“It is prudent, equitable, and fair to adopt the central government’s Motor Vehicle Aggregator Guidelines, 2020 which has proposed that at least 80 percent of the fare applicable on each ride is given to drivers and the remaining charges shall be with the aggregator,” said Satya Arikutharam in his recommendations.

On the sidelines of the meeting, Arikutharam told Moneycontrol that Ola, Uber and Rapido should consider joining the open-source mobility platform Namma Yatri which is a win-win for everyone.

Amidst the issues between the ride-hailing firms and the transport department, Bengaluru Auto Rickshaw Driver's Union (ARDU) has come up with its own open-source transport app and launched a beta version, Namma Yatri with the objective to charge fair prices to take on rivals like Ola, Uber and Rapido.

The Karnataka High Court on October 14 ordered the government not to take any coercive action and allowed the companies to charge 10 percent of the base fare as a convenience fee along with 5 percent of GST as a temporary rule before the authorities come up with a plan.

However, companies have expressed concerns over charging lesser convenience fees like 10 percent of the base fare as it will not be able to cover the costs.

In fact, ride-hailing major Uber India said that it may limit the auto services in some parts of Bengaluru. Running the business may turn unviable due to the Karnataka High Court’s temporary orders to cap the commission charged by the aggregator at 10 percent, an Uber spokesperson said in a blog post on November 1.