Karnataka introduces minimum fare for Ola, Uber and other aggregators

The Karnataka government has finally introduced a new fare structure for all cab aggregators including home-grown major Ola and San Fransisco-based Uber. The duo holds a majority stake in cab hailing space in the state.

The transport department led by H.M.Revanna has fixed a minimum and maximum fare by dividing cabs into four different makes of vehicles, based on their purchase price cost, reports ET.

As per the new fare structure, while a cab that costs less than Rs 5 lakh can charge a minimum of Rs 44, high-end cars (those above Rs 15 lakh) can charge a minimum of Rs 80.

Following the new fare structure, cab-hailing services can practice dynamic fare pricing in the state. However, it will not impact the current fare structure much.

In March last year, the Karnataka transport department announced its planning to fix a minimum fare for taxis attached to Uber and Ola in the city, with a mandate to protect the driver’s interest.

Also Read: Karnataka to launch its own electric autos in Bengaluru

The then commissioner of transport department M K Aiyappa also promised to set up a committee that will be headed by an additional commissioner and the fares will be set up accordingly.

While the maximum rate that can be charged by the aggregators was already in place, Ola and Uber are becoming increasingly competitive for local cab drivers by offering discounts and incentives to customers and driver partners respectively. As of now, the taxi aggregators charges as low as Rs 6 per kilometer.

The maximum fare that can be charged by the aggregators is Rs 14.50 for non-air conditioned taxi and Rs 19.50 for an air-conditioned taxi. Besides Karnataka, Maharashtra and Delhi also introduced regulation of fares of app-based cab-hailing services.

Last week, protesting against irregular income and falling incentives, cab drivers of app-based services including Uber, Ola and Fasttrack have reportedly gone on strike in Chennai.

Almost 40,000 taxis reportedly were off the road as drivers demand intervention from the government to regulate app-based cap services.

The post has been updated with some details in the fourth para.