NEW DELHI: The modified radio taxi scheme unveiled by the transport department on Monday could mean bad news for most app-based taxi services in the city. Radio taxis run under the scheme will require installation of GPS, use of clean fuel and compliance with the state transport authority (

) fare structure. At present, most app-based taxi services use vehicles with all-India tourist permit that don't run on

. Cab rates are also different for all.

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One of the stronger points of the evolving city taxi story has been the high degree of competition in the sector leading to a better deal for consumers. However, the new policy is likely to kill this competition. It has made mandatory for all cab service to have a call centre, a GPS system embedded in the taxi, a fleet of at least 200 taxis – in short, requirements that do not fit into the app-based aggregator model which takes the help of new technology to significantly lower overhead costs and make fares cheaper. The effort should have been to regulate this new model instead of coming out with rules that can be met only by radio taxis which are generally more expensive.

STACNGUnder the new scheme, taxi services using the aggregator model will be allowed to register and get a licence as a radio taxi operator, provided they switch to clean fuel. However, almost all the vehicles used by these services are tourist taxis which run on petrol or diesel. Since these vehicles have all-India tourist permits-thus not allowed to run in the NCR-they aren't CNG vehicles. A senior transport official said, "Vehicles under the radio taxi scheme are mandated to run on clean fuel, have GPS as well as a call centre. These will have to be implemented by the app-based taxi providers as well".Another sticking point for app-based taxi providers is the fare structure. At present, taxi service providers like Ola, Uber and TaxiForSure offer a graded fare structure. For instance, TaxiForSure charges a flat Rs 49 for the first 4km for both its hatchback and sedan vehicles. Thereafter, it's Rs 14 per km for a hatchback and Rs 16 per km for a ride in a sedan. Uber charges Rs 50 as the base fare and thereafter Rs 15 per km for UberX, and Rs 75 as base fare and Rs 18 per km for UberBlack. On the other hand, Ola charges a flat Rs 200 for the first 8km in a sedan and Rs 100 for the first 4km in a mini cab. Thereafter, it charges Rs 18 per km for a sedan and Rs 10 per km for a mini car, with a waiting charge of Rs 2 per minute. It has a separate "prime time" rate.Under the new scheme, rates would have to conform to the STA's fare structure: Rs 23 per kilometre. Service providers cannot charge more than the STA fare, though they can charge less.Other changes in the scheme include, lowering of basic educational qualification of the driver from Class X-pass to middle school or Class VIII-pass. Also, the taxi service provider does not have to show 1,000 sq ft space for parking vehicles. Prior experience of offering a cab service is not necessary.It’s important to realize that new technologies have thrown up new business models. In retail, e-tailers like Flipkart and Amazon have begun a veritable revolution, while in telephony voice-over-internet-protocol is making talk virtually free. In turn, this has generated competitive pricing with attendant benefits for consumers. To kill the advantages of technology in cab services would be like preventing e-tailers from selling goods cheap or ignoring the benefits of cheap VOIP-based telephone talk.Also, the idea of putting the onus of background verification on the operators of these services doesn’t seem a sensible way of handling the problem. A much better way of ensuring that drivers are screened would be to create a public transport driver’s licence which would be granted by transport department only after meaningful police scrutiny. The law can then mandate that only holders of these licences can be employed by anybody operating public transport of any kind. This is a more workable idea than each operator trying to run a verification system of its own. Of course, this means the police will have to make the checks rigorous, but that is in any case desirable, indeed, necessary.