Govt to permit cab aggregators 3x base fare as surge price: Report

The draft regulations for cab aggregators will allow them to charge as much as three times the base fare as "surge pricing", as per The Economic Times.

The surge price limit is one of the many issues the new norms would address. These would likely be in line with proposals made in December 2016, the paper quoted a government official say.

Moneycontrol could not independently verify the report.

These regulations follow after the new Motor Vehicles Act which now identifies cab aggregators as digital intermediaries or marketplaces – removing any grey areas for policy.

While to be implemented on a national level, states will have wiggle room to consider local factors. “But they’ll have to come up with reasoning in case of local variations, which is fine,” the official added.

The clause is due to the fact that some states already have rules for cab aggregators. Karnataka has already set minimum and maximum fares, based on the vehicle tier. For example, luxury cars can charge surge up to 2.25 times while small cabs are allowed 2x the base price.

Ola and Uber did not respond to ET’s queries.

Surge prices are implemented by taxi apps such as Ola and Uber when available vehicles are limited in number, but the demand is high. While it is seen as a necessary model for aggregators, consumers have identified it as a problem.

As per a LocalCircles survey of 51,000 respondents, 39 percent identified surge pricing as the biggest issue; 49 percent supported caps on surges at 25 percent while 45 percent wanted the practice banned.

As per experts, India should look at existing regulations in London, New York and California to understand and learn from the global industry, before framing domestic rules.