Ola, Uber commission charged on rides may be capped at 10% of total fare

The state governments may also get to fix the base fare that can be charged from the riders and suggests that surge pricing may be capped at twice the base fare.

Money Transport

The government has now released a slightly modified version of its draft rules for cab aggregators like Uber and Ola. These rules once approved will form part of the Motor Vehicles Act 2019, made into law recently. One of the important provisions in the new draft rules is to cap the commission being charged by these firms on the rides to a maximum of 10% of the total fare. The firms are now pocketing 20% or even more.

The draft rules framed by the Centre realises that the state governments may want their pound of flesh too and there is a suggestion that the states may impose a fee on the earnings of the cab aggregators at their end. The state governments may also get to fix the base fare that can be charged from the riders and suggests that surge pricing may be capped at twice the base fare. (the earlier draft had suggested thrice the base fare and now pared down to twice). The base fare could be fixed on a quarterly basis.

Surge pricing has been a critical issue with the riders who regularly use these cabs. These new draft guidelines have introduced a clause that says a driver may be permitted to operate surge rides to a maximum of 10% of the rides he handles in a day.

The government says these guidelines are meant to address all aspects of regulating the operation of the app-based ride-share taxis in the country. The government recognises the importance of these services on Indian roads since it helps in bringing down the number of private cars and vehicles on the roads. That results in lesser traffic woes in cities and reduced pollution as well. It wants the state governments to also alter their perspectives and encourage the cab aggregators to operate within the regulations laid down for them. The safety of the riders and interests of the drivers should also be factored in, the government opines.

Another issue that irks the riders is frequent cancellations by the drivers after having accepted the ride. The new draft regulations suggest a penalty in the 10% to 50% range subject to a maximum of ₹100. A similar penalty will be on the riders if they cancel the ride without any proper reason.

Addressing the safety concerns, the suggestion is to institute an insurance cover for each rider of ₹5 lakh and verification of the drivers through the use of technology to ensure there has been no change in the driver midway.

It is expected that the formal rules will be promulgated by year-end.