Ola, Uber suspend surge pricing in Delhi after govt threatens to cancel permit

New Delhi: Taxi aggregators Ola and Uber have suspended surge pricing after Delhi government threatened to cancel permits for charging higher than prescribed fares.

On the fourth day of odd-even scheme run by Delhi government, passengers complained of difficulties in booking cabs as these platforms showed fares to be as high as five times than the normal charge.

The firms faced flak on social media with many commuters severely criticising taxi aggregators' surge pricing.

There is also a petition on Change.org, a website for activist groups, against the surge pricing, which is a technique used to raise fares to provide drivers the incentive of keeping their cab running while also making it available for the user irrespective of the demand.

"However, given the threat of Delhi government to cancel permits and impound vehicles of our driver partners, we are temporarily suspending surge in Delhi with immediate effect. We hope to work with the government to keep Delhi moving, especially during this time when the citizens need us the most," Uber India General Manager North Gagan Bhatia said.

Representational image. IBN Live

Representational image. IBN Live

He added the company "regularly does surge pricing when demand outstrips supply" and that higher prices are required to get cars on the road during the busiest times.

Ola said it has also "temporarily pulled out peak pricing in Delhi NCR, in support of government's odd-even initiative".

The firm added it has stationed volunteers at key traffic junctions, around metro stations and other high footfall areas across the city to engage and guide users towards suitable ride-sharing option.

Earlier in the day, Delhi Chief Minister Arvind Kejriwal warned of "strict action" against app-based taxis including cancellation of permits and impounding of vehicles, for charging fares more than the rates prescribed by government.

"Strict action including permit cancellation and impounding of vehicles will be taken against app-based taxis which charge fares more than government-prescribed rates (sic)," Kejriwal had tweeted.

Interestingly, Karnataka government has already banned surge pricing as a part of its rules for cab aggregators in the state.

The government said it has received complaints of surge pricing after odd-even scheme was kicked off on April 15. The rates were allegedly also hiked today, the first full working day of the fortnight-long scheme when offices, schools and other institutions reopened after an extended weekend.

Transport Minister Gopal Rai made an appeal to the commuters to register complaints on 011-42400400 against exorbitant fares charged by the app-based taxi service providers.

Stating that it notifies every customer of the higher fare before confirming the order, Bhatia said without surge pricing, there would be no car available when people need it.

"... the prices are sometimes higher than our usual low fares... airlines and hotels are more expensive during busy times. Uber is as well," he said.

Contending that the company does not charge surge fee just to make a buck, Bhatia said Uber takes a "small fee of the transaction, and the vast majority of the fare goes to the driver so that we can maximise the number of drivers on the road".

"The point is in order to provide citizens with a reliable ride, prices need to go up temporarily. Despite this, 92 per cent of the trips in Delhi happened on regular fares, even during the first phase of odd-even scheme," he said.

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Updated Date: Apr 19, 2016 11:01:15 IST

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