Home >News >India >Delhi’s congestion fee plan to make taxi rides dearer, affect cabbies

NEW DELHI : The Delhi government’s plan to impose a congestion fee on all trips made by ride-hailing services to and from Delhi will make taxi rides costlier, besides affecting cab drivers, industry executives said.

As part of its plan to encourage the adoption of electric mobility, chief minister Arvind Kejriwal’s government on 7 August announced Delhi Electric Vehicles Policy 2020 to offer subsidies, waivers and incentives to purchase electric vehicles (EVs). The policy also aims to disincentivize the use of internal combustion engine vehicles by levying pollution cess, congestion fee for cab aggregators, and extra road tax on petrol and diesel cars, especially luxury vehicles.

“An appropriate congestion fee shall be levied on all trips originating or terminating within the NCT (national capital territory) of Delhi and taken using cab aggregator and ride hailing services. This tax shall be waived for rides taken in e-two wheeler, e-auto or e-cab. Tax due shall have to deposited with the GNCTD every month and shall be allocated to the state EV fund," according to the policy document.

Congestion pricing has been used in some developed nations to reduce traffic and air pollution by charging a higher price in congested areas of a city.

Industry executive said congestion fee should not target cab aggregators as taxis comprise around 2% of all the vehicles plying in Delhi. According to the Delhi Economic Survey, there were 11.4 million vehicles in the national capital, including around 200,000 taxis, in 2018-19. Besides, such a fee must be charged based on the traffic congestion in a particular area, around a particular time, and not target a specific category of vehicle.

“Other cities such as London introduced such a levy to discourage people from using certain roads at a particular time to manage traffic. Besides, shared mobility was not included in this," an industry official said, requesting anonymity.

Rameesh Kailasam, chief executive of think tank India Tech said the policy is a step in the right direction, but there are issues with who will have to bear the burden of the congestion fee. “Delhi has 66% two wheelers, 30% private cars and 2% cabs, all of which do not run through aggregators, but the policy seems to apply the feebate concept by levying congestion fee on aggregator platforms only that are already running on CNG. This is not only likely to hit livelihoods and increase costs for passengers but penalises CNG vehicles," he added.

Another official said the congestion fee is likely to be imposed next year. “Congestion fees (the quantum) will be decided after stakeholder consultations," said Jasmine Shah, vice-chairperson of the Dialogue and Development Commission that worked with the Delhi government to frame the EV policy.

Pretika Khanna contributed to this story

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