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Radio Taxi Association supports Karnataka ban on surge pricing

Taxi The Radio Taxi Association, whose members include Meru Cabs and Easy Cabs, have defended in the Karnataka High Court new rules by the state government that mandates online taxi aggregators to acquire licenses and end surge pricing.

The association, which has over 50,000 taxis spread across 14 taxi firms, has pleaded that the norms should be uniform in the interest of consumers and ensure that a monopoly is not created by playing the price arbitrage.

"We cannot have two laws," said Siddhartha Pahwa, secretary of the Radio Taxi Association and chief executive officer of Meru Cabs. "We are against surge pricing."

Uber, the world's largest taxi aggregator, has sought quashing of the Karnataka On-demand Transportation Technology Aggregators Rules, 2016, calling these unconstitutional and without legislative backing. Uber said it was a marketplace that connected riders with drivers and it never initiated a transaction.

Justice Aravind Kumar, hearing the petition by Uber, adjourned the hearing to June 23, after the Karnataka government counsel sought time.

On June 1, the Judge had directed the Karnataka transport department to stop impounding taxis on grounds of non-compliance with rules that came into effect in April. On Monday, the court maintained the transport department should suspend impounding of taxis without license till June 23. It also has prohibited surge pricing by these two firms till then. A Uber spokesperson confirmed the development.

Aggrieved drivers, affiliated with both Uber and Ola, whose vehicles were impounded by the transport department's action had also petitioned the court.

The licence bans surge pricing, unpopular with commuters, and requires compliance with maximum fares set by the government periodically and registering services with local transport authorities.

Uber and rival Ola have applied for a licence but have not yet received approval.

Pahwa of the Radio Taxi Association says a price ceiling, suggested by the government, would help in protecting consumer interests as well as of the taxi operators, who have been in the business for over eight years.

Both Ola and Uber work on an a asset light business model, where individual taxi drivers on the platform seek out consumers using their smartphone apps for cabs to go to another destination within a city. Both firms are spending huge amounts of money in offering incentives to drivers and discounts to customers to use their platform.

Karnataka is the first state in the country to license taxi aggregators. About 50,000 taxis in Bengaluru are affiliated with Uber and Ola.