The K'taka Transport Department and app-based auto aggregators are in loggerheads again: Here's why

Cab aggregators Uber / Ola. | Representative Image

The Karnataka Transport Department and representatives of ride-hailing firms Ola, Uber, and Rapido failed to reach common ground on fixing the convenience fee levied on operating autorickshaws in the city even as the parties met at the Transport Department on October 29.

This comes after 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.

The Karnataka High Court had also given 15 days time to the state government, regulators, and cab aggregators to work out a fair pricing mechanism. The next hearing was adjourned to November 7.

However, during the meeting held on Saturday, the companies argued to fix the convenience fee at 25 percent of the base fare, while the Karnataka Transport Department stressed continuing the court-fixed temporary rate of 10 percent. Earlier, the companies were charging a flat rate of Rs 40 per ride as a convenience fee.

The meeting on Saturday was headed by N.V. Prasad, Secretary of Karnataka Transport Department with the presence of T.H.M Kumar, state transport commissioner. Prasad said that another meeting will be held to decide on the fares.

The convenience fee is the amount charged by the companies to consumers for the app-based convenience of finding autos and for the door-step pickup option.

“The reason we levy a convenience fee is to offer ease to customers in terms of both hailing and door-step pickup. After several calculations we strongly feel 25 percent of the base fare is fair and reasonable,” said one of the ride-hailing company’s spokespeople requesting anonymity.

The issue of over pricing started with the Karnataka transport department calling Ola, Uber, and Rapido autos ‘illegal’ and issuing a directive to the companies to apply for a separate three-wheeler licenses. However, despite the autorickshaw ban, Ola, Uber, and Rapido have continued services in the state.

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 transport app and launched a beta version with the objective to charge fair prices to take on rivals like Ola, Uber, and Rapido.

The application does not support online payment, but rather gives a price band for the riders as quotations. Drivers can charge anywhere between the price band provided in the app.