Indian government issues fresh guidelines for cab aggregators like Uber, Ola putting a cap on surge pricing

Prices of cab availing services likely to get lower as the government issues new guidelines to cab aggregators.

TechSamvad November 28, 2020 15:11:52 IST
Indian government issues fresh guidelines for cab aggregators like Uber, Ola putting a cap on surge pricing

Ola cabs

The ministry of road and Transport highways, India announced new guidelines for cab aggregators through a notification released on 26 November. The ministry issued the guidelines under the part of Motor Vehicles (Amendment) Act, 2019, that states take into account before issuing a license to state aggregators. The regulations define cab aggregators as digital mediators or marketplaces for passengers to connect with drivers for the intent of transportation.

“The city taxi fare indexed by WPI (Wholesale Price Index)for the current year shall be the base fare chargeable to customers availing aggregator service,” said the guidelines issued by the ministry of road and transport highways.

The cancellation fee is capped at 10 percent of the total fare, not exceeding Rs 100 for both users and drivers. On the other hand, aggregators are allowed to charge fares that are up to 50 percent lower than the base fare. The fare will be divided in a ratio of 80 percent to 20 percent from driver to aggregator respectively. The maximum surge pricing can be at most 1.5 times the base fare. There are conditions of aggregator license being revoked like a violation of contractual obligations, ‘systemic failure’ to ensure the safety of riders & drivers, unjustified surge pricing, violation of safety standards, financial inconsistencies to name a few.

A 24x7 control room has to be set up monitoring movement of vehicles at all times and women should have the option to pool only with female passengers.

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