Maharashtra to regulate fares of app-based cab-hailing services

After Delhi, now Maharashtra is planning to regulate ride-hailing services such as Uber and Ola. According to a media report, the state wants ride-hailing companies to charge a fixed rate.

In Maharashtra, the state government will decide on the recommendations during the upcoming winter session of the Maharashtra state government in Nagpur. The Bombay HC bench will hear the matter after eight weeks and said the government will not take any coercive action against Ola and Uber drivers until a court order was issued, said a PTI report.

The division bench was hearing a petition filed by the taxi companies, Uber India Ltd and Ola Ltd, and six drivers associated with these companies. In their petition, the drivers said the new regulation prevents app-based taxis to ply within the Mumbai Metropolitan Region on a national tourist permit and drivers have to obtain local permits. The drivers allege that obtaining local permits will be ten times costlier than the permits of drivers of black-and-yellow taxis.

The government in its response said it was necessary to take adequate measures to stop the ‘predatory’, ‘monopolistic’, and ‘exploitative’ business tactics of app-based cab operators.

Karnataka put cap on ride-hailing services

Taking note of their unfair practices, Karnataka government too had put cap on ride-hailig operators. The Karnataka High Court had upheld the state government’s decision to ban surge pricing by Ola and Uber last year. The state had stipulated a rate of Rs 19.50 per km as the upper limit.

Uber had challenged this in the court and the Karnataka HC had observed that the state government was well within its right to frame rules under the sections of the Motor Vehicles Act. The state is planning to curb the practice adopted by ride-hailing services.

Delhi formulating provision for price surge

Ola and Uber had cut down surge pricing in Delhi during the enforcement of the odd-even rule following Aam Aadmi Party’s order. The Delhi government also has been reportedly formulating provision to ban surge pricing by app-based cab aggregators.

The provision to put a cap on surge pricing is a part of the City Taxi Scheme 2017, being formulated by the state government. However, the cab aggregators said that the surge pricing as an incentive for drivers to bring more vehicles to commuters when demand is high.

The move to regulate the minimum fare may adversely affect business for Ola and Uber, who have gained customers through the cheap offering in comparison to autorickshaw. Uber claims to have 450,000 registered drivers on its platform out of which 285,000 were active in July, Ola said it had 800,000 driver partners.