Karnataka government curbs surge pricing by Uber, Ola in Bengaluru

Finally the much-awaited Karnataka On-demand Transportation Technology Aggregators Rules, 2016, has come into effect from April 2. The new guidelines for taxi-hailing aggregators state that under no circumstances can they charge more than the maximum prescribed fare.

This has put an end to surge pricing by cab aggregators, who charged several times the regular fare during peak hours. The guidelines were necessitated after Ola and Uber began operations.

According to the MV Act, rates are fixed by the government for all aggregators licensed to operate. As per the norms, the maximum per-km fare will be Rs 19.50 for AC cabs and Rs. 14.50 for non-AC ones. "With the new guidelines, taxis will not be allowed to charge more during peak hours. But the operators can certainly lower tariff to gain a competitive edge," a transport department official said.

However, services offered at the lower end of the spectrum, priced between Rs. 6 and Rs. 13, can be offered at higher rates provided they don't cross Rs. 19.50 and Rs. 14.50 respectively, he said.

The guidelines make it clear there can be no dead mileage charges in the guise of ride-time charges. There is no room for minimum base fare, which is Rs. 50 to Rs. 100 for the first four kilometres in the case of many aggregators. However, passengers will have to shell out service tax.

The new norms also mandate that the aggregators check drivers' antecedents via police and not employ someone who has been convicted in the past seven years for driving under the influence of drugs/alcohol or under a CrPC section. Installing a GPS/GPRS system in all taxis is a must. It also insists for setting up of a control room, a system through which a panic button pressed by the passenger can alert the police.

Under the new rules, aggregators have to first register and obtain a licence to operate the services.