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Last Updated : Nov 05, 2016 05:08 PM IST | Source:

Bringing cab aggregators on par with city taxis: Will it fly?

Last month, the Maharashtra Transport authority released a draft of the Mahrashtra City Taxi Rules, 2016 that aims to put cab aggregators under the ambit of local taxi licence in the state. If proposals are accepted then life will change for cab aggregators.

Deepak Kumar

Last month, the Maharashtra Transport authority released a draft of the Mahrashtra City Taxi Rules, 2016 that aims to put cab aggregators under the ambit of local taxi licence in the state. If proposals are accepted then life will change for cab aggregators.  

According to the draft, cab aggregators will have to adhere to a cap on minimum and maximum fares. They will have to ply with a city taxi permit. A car under 1400cc will be charged a one-time permit fee of Rs 26,000 while cabs with an engine capacity of 1400cc or above will be charged a staggering Rs 2.61 lakh. More importantly, every cab aggregator will have to maintain an equal number of cars below and over 1400cc engines. And cabs with only cleaner fuels can ply.

What Doesn't Work
The clause requiring 50 percent of the aggregator's cabs to be over 1400cc does not make sense and is illogical, says Debi Goenka, environmentalist from Conservation Action Trust. City taxis all have small engine sizes, well below 1400cc. The aggregator should have the right to choose which car they want to run, he says.

Jaspal Singh, Partner of Valoriser Consultants, believes this 50:50 rule would discourage cab aggregators from introducing smaller vehicles as they would to compensate it with an equal number of bigger ones.


Surge pricing, a mechanism that allows cab aggregators to hike up prices on peak hours, has become the betenoir of government. But Shailesh Sawlani, General Manager, Uber (West) feels that fares should be determined by the market. “It (surge pricing) at the end of the day improves the service for commuters. They would rather pay a higher fare than not have any options available to commute."

Support for Ola & Uber
Among the reaons cited for regulating cab aggregators, the Motor Vehicle Department, Maharashtra refers to ride-hailing cabs' absolute control over fares as a big negative. The driver doesn't know the fares which is set by a software nor does he know the destination. Hence, the government has offered to make cab aggregators fall in line.  

Jaspal Singh feels the effect of these laws will not be long-lasting and won’t be a major cause of concern for likes of Ola and Uber. “When the diesel ban happened in Delhi, there was similar confusion amongst the drivers. But when they started realising that they have to live with this, they settled down."

The new regime, if it comes into force, will mean more costs for cab aggregators. But they will still have an edge over the city taxies, says Rajkumar Dham, Joint-Secretary of Jan Ekta Taxi Union. The reason being the city taxis will never be able to offer the kind of service cab aggregators provide which includes pick-up from home service and air conditioning, says Dham.

Pushback Against Regulations
Sawlani of Uber has a different take -- why not relax rules for city taxis instead of regulating the cab aggregators? "It would be better to relax regulations on taxis and autos as well,” he says.

The new policy, many believe, is an arbitray way to bring the ride-hailing cab services under government oversight. Singh of Valoriser Consultants says it is a haphazard way to integrate the existing operators. 

The cab aggregators until now have been plying on tourist taxi permits. The Tourist Taxi Permit Regulation is governed by Central Government but the permit is issued by the states. It was introduced with an aim to support tourism activities. No fare meter is installed as fare is mutually decided between the driver and the customer. Unlike a local taxi permit, getting a tourist taxi permit is very easy in Maharashtra. Also, tourist cars can run on diesel.

 “They (the new taxi rules) don’t solve Mumbai’s transportation problems. Incumbents [city taxis] may be facing pressure but we need to do what’s best for the citizens and the drivers. If this is what the public likes, why not change the entire system?” says Sawlani of Uber.

PC: Valoriser Consultants

What the Taxi Unions want

The Unions have a completely different view. Swabhiman Taxi Union member KK Tiwari says Ola and Uber should have their own cars and should be only luxury cars which would cater to the rich and would be above 2000cc.

"Our country is divided into several classes based on income, from the people on the footpath to the people living in high rises and bunglows. Just like that taxis should also be differentiated. We should be able to cater to the lower-middle class while these aggregators should cater to upper middle to upper class," he says.

The government issues tourist permits to promote tourism and these cars should not be used as local cabs, says Tiwari. 

The government's objective to regulate cab aggregators will be better served if it undertook measures to reform the entire taxi ecosystem, feel experts.

Uber has gone on to write a letter to Maharashtra CM Devendra Fadnavis saying the new rules are regressive and must not be imposed. The company has also started an online petition for which more than one lakh individuals have already signed up.

The taxi and autorickshaw drivers have asked the public to sign a petition to completely ban surge pricing and to allow cab aggregators to only run on clean fuel.

While the tug-of-war seems never-ending, Maharashtra's proposal to bring cab aggregators on par with city taxis will go some distance in resolving a few issues.

The Maharashtra Transport Authority has sought the feedback of the public and the stakeholder by November 5.

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First Published on Nov 4, 2016 04:19 pm
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