Ola faces govt backlash in Karnataka over convenience fee for Prime Play cabs

Karnataka government has always showcased its practice of closely scrutinizing the operations of the cab aggregator startups in the city, especially Ola.

At several points in past three months Ola had faced the government’s backlash regarding the issue of bike taxis. Not only was the Transport department unhappy with the company’s relaunch of the services without taking permission from the government, it also fined the company for using white plated personal bikes as taxis.

This had resulted in a six month ban for Ola which had been revoked in the next couple of days after a flak from the citizens around commuting problems following the ban and a plea from Ola outlining that rivals were also operating similarly and no personal bikes were being used. The end result was a need for a solid policy guidelining the functionality of these companies.

Just like the whole ban fiasco didn’t really make much sense, the newest concern of Karnataka government with Ola also shows a lack of understanding between the two bodies. This time the government has written to Ola about how it is violating the law by charging Ola Prime Play customers with a convenience fee for using the value added service of Ola Play.

Ola play had been launched in 2016 as a value added service for in-cab entertainment, and as per Karnataka laws under Motor Vehicles Act and the Karnataka On-demand Transportation Technology Cab Aggregators Rules value added services are not chargeable.

However, Prime Play is a special facility whereby customers can book cabs with zero waiting time by going to Ola zones and also getting the entertainment service.

The Hyundai backed firm had been charging a Rs 20 minimum fee that went up in sync with the cab fare, and several customers had complained against this unfair expense also pointing out that they should have an option to not pay for it if they don’t want to see it.

Now here, to a layman's understanding while charging for no wait time makes sense for the company, citizens have a point while questioning the fares around Ola Play services. Will posing this value added service as a separate facility clubbed with Prime Play rescue Ola from this point of scrutiny?

Ola hasn’t responded to ET’s query and so it remains to be seen how Ola reacts to this newest concern raised by Karnataka government.