In a new ruling that may turn out to be a mixed bag for Ola and Uber users in the Indian state of Maharashtra, the state government has introduced (via ET) a cap on the fares of app-based cabs. According to the new set of regulations, which are not immediately applicable and are deferred until April 6th, app based cabs’ prices cannot surge above three times the fare charged by state regulated ‘kaali-peeli’ taxis.
The streets of Mumbai Metropolitan region have about 80,000 app-based cabs and 42,000 kaali-peelis, the city’s signature black and yellow taxis. Nearly 4000 kaali-peelis are also registered to app-based taxi operators. Kaali-peelis have a base fair of Rs.22 and charge customer Rs.14.84 per Km. The resolution when implemented, will limit app-based taxi fares at Rs.44.52 per km regardless of the demand for rides. The fares of app-based cabs are usually much lower than kaali-peelis but in instances such as the 2017 deluge, aggregator cabs charged up to Rs.65 per Km.
Both Uber and Ola have faced intense scrutiny over exorbitant pricing during peak demands. Users have often taken to social media, pointing out cabs being priced at almost 5-6 times of base fares. Some cases have been extreme to the extent, that users have found uber cabs more expensive than an average domestic air ticket within India. Ola and Uber, the two main app based cab companies in India, have argued that the surge pricing is an integral part of their business model and helps them recover costs which they may otherwise loose while providing discounts and cashbacks to users.
Prices however are not the only aspect that will undergo changes under the regulations. Aggregator cab drivers will also have uniforms. Kaali-peeli drivers dress in the traditional light-brown Khakis whereas app-based cab drivers have not had a uniform till date. They will now however, dress in black trousers, a sky blue shirt, tie and black shoes.
The regulations were proposed by a committee chaired by retired IAS officer B C Khatua. The committee was set up by the previous BJP-Shivsena government to look into surge pricing by aggregator taxis following the demands voiced by trade unions. The regime has been accepted by the Transport Department and will come into force following the state cabinet’s approval. The government will not be taking any action until April 6th, when the Bombay High Court is scheduled to hear a plea by aggregators against the City Taxi Scheme introduced by the previous government.
We have asked Uber for a comment and shall update the story soon if we receive an update.