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Government to fix upper cap on taxi fares for app-based cab aggregators

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Until now, mainly Karnataka state government had raised objections on surge pricing and unlicensed taxis by cab aggregators like Ola and Uber. However, now a panel of high-level government officials has recommended fixing an upper cap on taxi fares but also suggested to liberalise city taxi permit scheme.

The panel was set up by the centre to lay down a stricter framework of transport regulations and road safety rules. It consisted of state transport ministers, headed by Rajasthan Transport Minister Yunoos Khan. The panel met at Dharamshala in Himachal Pradesh for two days to discuss these regulations.

Liberalise city taxi permit scheme. They (aggregators) should follow the rules relating to fares, fuel and safety as mandated by the Transport Department. Upper cap for the fares be fixed by the Transport Department,

said the panel today.

However, it is unclear who will decide this upper limit on the fares — the local transport bodies or the central government itself. So far, it is usually state governments (Karnataka, Delhi) who have intervened in the prevalent practice of surge pricing used by taxi aggregators to make cabs available during peak times.

In April this year, Karnataka government had banned surge pricing in the state by releasing a set of regulations. It also introduced a rule which made a licence and a tamper-proof GPS device compulsory for taxi aggregators.

However, it has also relaxed various rules in order to enable online taxi aggregators to operate smoothly in the state. These included bringing down the time period for drivers to be eligible for driving taxis, reducing license fees, security deposit, and aggregator license fee.

However Uber, which has always been a strong proponent of surge pricing, did not take this ban very well and filed an objection against the state Government’s decision. The two parties are due to meet in court on June 20 to discuss this matter further.

Meanwhile, Karnataka government also banned unlicensed cabs of Ola and Uber in last week of May. that, Ola became the first cab-aggregator to operate under a valid licence in Karnataka as it obtained the necessary permission from authorities.

However, Uber, once again, has come face to face with the state government as it recently approached the court again accusing Karnataka state transport authorities of refusing to accept their documents or even acknowledge the document submission for obtaining the licence.

It will perhaps be more beneficial if the new recommendations, which have been put forward in the panel meeting, are uniformly implemented by the centre across all states in order to avoid such frequent confrontations between cab aggregators and local authorities.

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