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Ola and Uber to face class action suit, NGOs seek damages worth more than ₹9k crore against surge pricing

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After a brief period of quiet and respite, troubles have stirred up again for cab aggregators in the country. This time, two non governmental organizations(NGOs) have filed a class action suit against Ola and Uber and are seeking damages worth more than Rs 9,000 crore for imposing surge pricing across the country.

Surge pricing has brought a whole host of troubles for cab aggregators in the country. From bans by state governments to lawsuits by NGOs — it makes you wonder if the scheme has even been worth all the trouble? Well, this time, according to a report in BloombergQuint, it is NGOs Nyaybhoomi and Pariwar Unity Road Safety Life Safety, who have approached the National Consumer Disputes Redressal Forum (NCDRC) with a case against Uber and Ola.

The forum is likely to take the case under consideration on October 5. If the decision goes against them, things could go very badly for the cab aggregators, considering the amount of damages demanded by the NGOs.

The complainants are seeking refund to and on behalf of all passengers across the country of an estimated sum of Rs.9,239 crore being the excess amount collected by the Ola and Uber in the past three years. The two companies started collecting excess fare in the form of surge pricing. Delhi High Court passed an order directing the companies not to charge in excess of notified fares but the practice continues till date. Hence this complaint.

Although, it is also pretty unlikely that any court in the country will actually make the companies pay out a sum this large, or spread across such a huge demographic area and time duration. Even disregarding the space-time considerations, there is still the fact that many state governments had not made any particular move to check surge pricing.

That said though, the lawsuit argues that app-based cab aggregrators like Ola and Uber are continuing to resort to surge pricing, despite clear orders to the contrary by the Delhi High Court back in August — which directed all of them to abide by Delhi government’s notified rates in the capital.  The lawsuit also alleges that the companies are still overpricing and charging money towards State or Municipal Corporation Development taxes that are not even payable to the state governments.

The NGOs apparently arrived at this humongous, 9,000 crore+ figure by applying some simple mathematics to publicly available data that includes excess amount charged per vehicle per trip due to surge, average number of rides per day per vehicle with surge pricing and average fleet size in India over the 3-year period. Apparently, the NGOs have consideredthe past 3 years to reach the huge damages.

Ola and Uber have been actively functioning in India for a longer period but only the last 3 years have been taken into account to arrive at this figure.

Meanwhile, it is unlikely that the companies will actually have to go through paying this sum, however, if they are indeed resorting to surge pricing despite directives already issued by various Indian authorities, the lawsuit could indeed spell some serious trouble for them.

A bibliophile and a business enthusiast.

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