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Road Transport and Highways Minister Nitin Gadkari. (ANI)
Road Transport and Highways Minister Nitin Gadkari. (ANI)

RSS’s Swadeshi Jagaran Manch asks Gadkari to better regulate surge pricing

  • This comes in the backdrop of the government recognizing and defining aggregators as digital intermediaries
  • Earlier, the law did not recognize web aggregators as an entity separate from a taxi operator

Swadeshi Jagaran Manch, a sister organization of the Rashtriya Swayamsevak Sangh (RSS) has written to the road transport and highways minister Nitin Gadkari that there is a need to better regulate surge pricing limits for taxi aggregators.

Ashwani Mahajan, All India Co-convener of Swadeshi Jagaran Manch told Mint that he has requested the minister that the taxi aggregator rules, under the recently amended Motor Vehicle (Amendment) Act, 2019 are made keeping the above public interest in mind.

“Just in the last two weeks, we received screen shots where a fare of rupees 2000 was quoted in Mumbai for a six minute ride. This is outrageous and plain profiteering by these platforms," Mahajan said.

Mint has not seen the copy of the letter.

This comes in the backdrop of the government recognizing and defining aggregators as digital intermediaries or marketplaces which can be used by passengers to connect with a driver for transportation, under the recently amended motor vehicles act that became a reality on August 9. The transport ministry will now frame rules, in consultation with concerned stakeholders, which will be finalized in the next few months.

Earlier, the law did not recognize web aggregators as an entity separate from a taxi operator. This made it almost impossible for the central government to intervene as lack of clear law was not laid out for this industry. App-based taxi operators have witnessed a significant growth, especially in the last six-seven years, with the entry of global players such as Uber into India, along with the rise of home-grown company Ola (ANI Technologies Pvt Ltd).

In August, Mint had earlier reported that the government could look at the issue of surge pricing—one of the biggest grouses for a customer—to be covered under the regulations. Besides, the focus will be making cab rides smooth and hassle-free by making passenger experience better and safety of women a top priority.

A senior government official told Mint nothing has been finalized as far as capping of fares is concerned and the government is yet to take a call on whether to stick to the December, 2016 guideline.

According to transport ministry’s guidelines released on December, 2016, for economy taxis, the maximum tariff may be permitted up to three times the minimum tariff or the base fare. Besides, to increase the availability of taxis during night time, maximum tariff may be allowed up to four times that of minimum tariff from 12 midnight to 5 am in morning.

“The State Department may however regulate the fares of the taxis in economy segment with the overall objective of facilitating the citizens with adequate supply at reasonable prices," the report said.

While it said that ‘dynamic pricing is an effective tool to equilibrate local short term supply during peak load situations’, high degree of variation in pricing should not be permitted as it may lead to exploitation of consumers in the time of crisis.

The guidelines said that the committee – comprising IT ministry, NITI Aayog, some states, among others,-- ‘strongly recommends that the tariffs of deluxe taxi segment should not be controlled and market dynamics should be allowed to determine the tariffs’.

According to LocalCircles survey, consumers from across the country are facing various issues with app-based taxi services like Uber and Ola. According to the findings of the survey, people want surge pricing to be capped at not higher than 25% across the country. The survey also suggested that app-based taxis should not be permitted to apply surge pricing on advance or scheduled bookings.

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