The Central government is likely to put a cap on surge pricing for the cab aggregators in the country. According to a senior government official, the government would permit cab aggregators to charge customers maximum up to three times the base fare during periods of high demand. The practice of increasing fare during peak hours or high demand by cab-hailing services like Ola and Uber has not gone down well with the Indian judiciary and both the Centre and state governments.
Ride-hailing apps including Uber and Ola have long argued in favour of surge pricing to regulate the demand and supply of cabs on their platforms. But in several instances, the riders have been charged abnormally high rate (As much as 5-10 times of the base charge).
“Surge pricing is intrinsic to the demand and supply situation (of cab aggregators),” the official said. “Like with the December 2016 guidelines, our policy will mention surge pricing and what should be the kind of capping, among other things.” The new guidelines will be in alignment with the updated motor vehicle law. Other guidelines are yet-to-be-framed, which will be in line with proposed regulations by the Central government in December 2016.
While making guidelines, the government will also be looking at safety measures for women passengers and the kind of vehicles to be used by app-based cab aggregators. The amendment in the Motor Vehicles Law, for the first time, recognizes cab aggregators as digital intermediaries or marketplaces. Earlier, the law did not recognize cab aggregators as separate entities.