Karnataka HC dismisses Ola, Uber petitions against 5% service-charge cap on app-based autorickshaws

The petitioners also sought a court directive to permit them to charge a commission/service fee of 20% and a surge price of up to twice the base fare for autorickshaws operating through their app-based platform, under the Motor Vehicle Aggregator Guidelines, 2020.

The Karnataka High Court has dismissed petitions by Ola and Uber against capping at 5 percent the service charge levied by app-based autorickshaws, bringing relief to passengers in Bengaluru.

"The writ petitions stand dismissed. It is, however, made clear that the aggregators would be entitled to collect service charges of up to 5 percent in addition to the fixed fare," Justice Suraj Govindaraj said on May 27. The court is yet to release the order in full.

The two ride aggregators had challenged a November 2022 transport department notification that capped the service charge at 5 percent plus 5 percent GST and the base fare at Rs 30 for autorickshaws.

The government stepped in following a public outcry after app-based aggregators increased the minimum auto rickshaw fare to Rs 100 in October 2022. The earlier minimum fare was Rs 33.

The aggregators challenged the government notification in the high court. In October 2022, the Karnataka High Court, as an interim measure, set the convenience fee at 10 percent. Then, in November, the transport department came out with the service charge cap and GST.

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Ola and Uber argued that capping service charges was contrary to the law and sought a directive for the government to fix fares for autorickshaws on aggregator platforms in Karnataka.

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"This should be done after properly considering and qualitatively assessing the relevant factors and, importantly, adhering to the Motor Vehicles Aggregator Guidelines-2020 framed by the central government,” the petitioner said.

They also wanted to be allowed to charge a commission/service fee of 20 percent and a surge price of up to twice the base fare.

The government argued that the petitioners' services were similar to contract carriages and it had the authority to regulate them in public interest.

The court dismissed the petitions filed by Uber India Systems Pvt Ltd, the operator of Uber, and ANI Technologies Pvt Ltd, which operates Ola.