Karnataka govt issues notice to Uber, Ola & Rapido for high auto rickshaw prices

The Transportation Department of Karnataka on Thursday issued notices to cab aggregator firms Ola, Uber and Rapido for charging high prices to riders hailing auto rickshaws. The notices were reported by the Times of India and The Hindu. The notices reportedly order the aggregators to stop providing auto rickshaw services within three days.

We have reached out to Uber and Ola for comment. We will update this piece if we hear back from them. Karnataka Transport Commissioner THM Kumar was not reachable by phone; we have filed for a copy of the notices.

In a statement provided to Entrackr, a Rapido spokesperson said that the company was not doing anything illegal with its auto rickshaw fares. "All our fares are determined in accordance with the fares decided upon by the state government, and Rapido is not charging any extra money over those fares," the company said.

"Rapido will continue operating in Bengaluru under the ambit of the law," the spokesperson added, saying that the company would respond to the transportation department's notice within the stipulated period.

Ola, Uber and Rapido have been charging upwards of Rs 100 per trip, even for trips shorter than 2km long. This flies in the face of Karnataka’s fare cap of Rs 30 for the first kilometer. On top of this, auto unions in Bangalore alleged that this price increase didn’t benefit them much, leading some to explore creating their own aggregator app. (Entrackr was also able to verify the price discrepancy by comparing street fares with the Uber and Ola prices.)

It is unclear if the aggregators plan on complying with the order. Government action against cab aggregators has been limited by a five year old Karnataka High Court order that reportedly ties the government’s hands in taking any coercive action against the companies. Meanwhile, both Ola and Uber’s licenses have expired, with the transport department not clearing applications to renew them.

The court stay has not, however, stopped scrutiny of the companies by transportation authorities, who have filed 292 cases of overcharging riders against the companies. “They have to fix the fare as per the slab fixed by the government and cannot take passengers for a ride,” Kumar said.

Transport associations in Karnataka have also complained about bike taxis being allowed in the state, cutting off potential revenues for them. Bike taxis have generally not obtained commercial licenses like auto rickshaws and Uber/Ola cabs have. 

Update (17:38): Added statement by Rapido.