BENGALURU: The Centre is likely to permit cab aggregators to charge customers up to three times the base fare during periods of high demand, according to a senior government official aware of the deliberations on a new set of regulations being drafted for the industry. Ride-hailing apps including Uber and Ola have long argued in favour of surge pricing to regulate the demand and supply of cabs on their platforms.The soon-to-be-framed regulations will specify the allowable limit for such price hikes in addition to other guidelines that could be in line with those proposed in December 2016, the official told“Surge pricing is intrinsic to the demand and supply situation (of cab aggregators),” the official said. “Like with the December 2016 guidelines, our policy will mention surge pricing and what should be the kind of capping, among other things.”The proposed rules for cab aggregators follows the new motor vehicle law, which for the first time recognises cab aggregators as digital intermediaries or marketplaces. Earlier, the rules did not recognise cab aggregators as separate entities, causing firms such as Uber and Ola to operate in a grey zone.Uber and Ola did not reply to emailed queries from ET. While the new rules will apply to cab aggregators across the country, states will have the leeway to make changes. “But they’ll have to come up with reasoning in case of local variations, which is fine,” the official added.For instance, Karnataka — the first state to regulate cab aggregators — already has a minimum and a maximum fare for app-based cab companies, with slabs based on the cost of the vehicle. However, the maximum variance between the minimum and maximum fare is 2.25% for luxury cabs. For small cabs , the permissible level of surge pricing is set at 2X.Consumers also see surge pricing as one of the biggest pain points when it comes to using the services of cab aggregators such as Uber and Ola.In a LocalCircles survey, 39% of the 51,000 respondents said their biggest issue with cab aggregators was surge pricing. As many as 49% said surge pricing should be capped at 25% over the regular fares, while 45% said it should be banned.Cab aggregators, however, argue that surge pricing will encourage drivers to cater to areas where demand is high. Experts reckon cab hailing has become an integral part of urban transportation in India, especially in the large metros, due to lack of adequate public transport.While surge pricing is the most efficient way of regulating demand and supply, experts say India should learn from global markets before framing laws for the sector. “We need to see what has happened in London, New York and California, in terms of policies regulating cab aggregators,” said a senior adviser to one of India’s large taxi aggregators, who did not want to be identified.“India is in a good position to understand what has happened in this (cab hailing) industry globally, and frame rules accordingly.” In addition to new guidelines on pricing, the upcoming regulations are also expected to address issues such as safety measures, particularly for women passengers, after the Supreme Court asked the Centre in July to frame rules on this, while hearing a petition. The government could also look at regulating the type of vehicles that can be used by cab aggregators.