Ola, Uber temporarily withdraw surge pricing in Delhi after Kejriwal warning

With Delhi Chief Minister Arvind Kejriwal issuing a strict warning against overcharging by app based services during the implementation of the odd-even vehicle rationing scheme, both Ola and Uber decided to temporarily suspend surge pricing in the capital on Monday.

Said Gagan Bhatia, general manager, Uber North: “Given the threat of the Delhi government to cancel permits and impound vehicles of our driver partners, we are temporarily suspending surge pricing in Delhi with immediate effect. We hope to work with the government to keep Delhi moving, especially during this time when the citizens need us the most."

Added Deep Singh, Business Head (North), Ola: “To make the government’s odd-even initiative a success, Ola has temporarily pulled out peak pricing in Delhi NCR.”

On the first full working day of the odd-even vehicle rationing scheme commuters took to social networking sites to complain of the huge fares they were being charged. Some also said that they were violating the odd-even rule on purpose as the fine which was Rs 2000 for the entire day was less than what they would have to pay one way for the ride.

Taking strong objection to the surge pricing by Ola and Uber, Kejriwal tweeted: “Strict action, including permit cancellation and impounding of vehicles, to be taken against taxis which charge rates more than government prescribed rates.”

A few hours after this both Uber and Ola announced temporary suspension of the surge pricing citing “support for the government’s odd-even initiative.”

The Delhi Transport Department had issued a helpline number aimed at bringing overcharging drivers to book, warning of legal consequences, including cancellation of permits and impounding of vehicles. Officials in the department stated that while the government would endeavour to penalise the accused cab driver with immediate effect in “as many cases as possible,” it also intended to tabulate the complaints and forward them to both companies for disciplinary action.

Defending surge pricing Bhatia says: “Higher prices are required in order to get cars on the road and keep them on the road during the busiest times. This maximises the number of trips and minimises the number of people stranded. Without surge pricing, there would be no car available when people need it."