New Guidelines For Ola, Uber On the Cards. Will It Affect Your Wallet?

According to a news report, the central government plans to cap the commission for aggregators to a maximum of 10 per cent of the total fare, compared with about 20 per cent currently while also putting in place rules around surge pricing and rider safety
New Guidelines For Ola, Uber On the Cards. Will It Affect Your Wallet?
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In what would seem like a relief for cab drivers and a potential headwind for cab aggregators, the Indian government is looking to cap the commission for the likes of Uber and Ola, The Economic Times reported on Thursday, citing people privy to the matter.

Across the country, drivers who are signed up with such cab aggregators have expressed concern over shrinking earnings for them over time. As these companies have scaled, incentives have been known to decrease gradually, with drivers facing the heat.

According to the ET report, the central government plans to cap the commission for aggregators to a maximum of 10 per cent of the total fare, compared with about 20 per cent currently, while state governments could also levy a charge on their earnings, if they choose to.

Ola and Uber did not respond to requests for comment.

Surge Pricing

The rules, which could be in place by year-end, also deal with the issue of surge pricing. Currently, both Ola and Uber have the ability to raise the charge of rides during peak-hour traffic or adverse weather conditions when availability of cabs is low.

This has often led to riders complaining of paying exorbitant rates for rides that several times less during other times of the day.

According to a recent survey by community-centric social network LocalCircles, driver cancellations and surge pricing are the biggest problems for Indian riders; 36 per cent of the more than 51,000 respondents chose cancellations by drivers while 29 per cent went with the latter.

The report said the government has suggested capping surge pricing to a maximum of double the base fare, which can be fixed by the state or suggested by the company, revised on a quarterly basis. There is also a clause which stipulates that no more than 10 per cent of daily rides by a driver can come under surge pricing.

More than 90 per cent respondents to the LocalCircles survey said the companies and the drivers, just like the customer, should be penalized for cancelling a ride.

The new guidelines, as reported, suggest a penalty between 10 per cent and 50 per cent of the total fare of up to INR 100 for ride cancellations.

Safety

The new rules also deal with the safety aspect of a ride, with the possibility of government mandating an insurance cover of INR 5 lakh for each rider.

The companies would have to verify a driver once every three hours to ensure that the person registered is the one driving the cab.

New rules also suggest a female-only pool option for female passengers, the report said.

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