Delhi government to fix tariff ceiling for Ola and Uber

After a tough drive in China, looks like India is not going make it easy for cab aggregators like Ola and Uber. Atleast Delhi government is all set to regulate the surge pricing and other tactics to increase tarriff.

As per a recent draft, Delhi government will now not allow surge pricing and fix a maximum fare cap for Ola Uber. Aam Aadmi Party government is preparing, a policy that as per the Delhi high court orders.

As per transport minister Satyendar Jain, “The government will fix the rates and cabs will charge within the limit,” said on Wednesday. “If there’s a law for autos and taxis, Ola and Uber cannot be above it.”

These proposals will then be sent to the lieutenant-governor for approval. Government is acting under the amended motor vehicles law that the Union cabinet approved a week ago.

Cab aggregators use surge pricing model which is a demand-based model that makes fares fluctuate, sometimes more than five times the base value. The current policy will make sure that Ola and Uber wewill do away with this model and also make it mandatory for all taxis to install fare meters.

The idea is to create level-playing field, for other cab rental companies such as Meru and Carzonrent-owned Easy Cabs. After the advent of companies like Ola and Uber they were swept aside. Ola and Uber are known for their attractive offers for pasengers and lucrative incentives to their drivers.

Soon, Ola and Uber will have to take an aggregator’s licence and follow taxi rules of every state. Mumbai has strict rules for a licence holder, where one cannot have more than 4,000 cabs, and 2,500 in Delhi, and all taxis should run on eco-friendly CNG.

A recent government study found that fares charged by Ola and Uber were inflated. These apps use GPS on the driver's phone to calculate distance and fare.  Hence, the fares wary as per mobile networks many a times cell phones often connect to a tower far from the pick-up and drop-off points.