Centre: Won’t rein in cab surge pricing

The Centre is not looking to clamp down on surge pricing by cab aggregators such as Ola and Uber as it wants to increase supply-side options for consumers.

“If the aggregators’ presence is leading to increased choice for consumers, greater productivity and earnings for cab drivers, then we would like to liberalise the space. There is no intent to cap the pricing. In the upcoming guidelines, there could be two categories — intra-city and inter-city cabs,” a government source told BusinessLine .

“We want to liberalise city taxis. The idea is to encourage options that will discourage people from bringing out their personal cars — be it through car-sharing, car-pooling or any other such apps,” he said.

In fact, the Transport Ministry is also toying with the idea of providing incentives such as free parking to such taxis so that they don’t clog the roads.

“There can be 20 per cent reservation for city cabs in parking lots, free of charge,” the official said, adding that there will be broad guidelines, without amending the Motor Vehicles Act. Over a week ago, a committee comprising the Highway Ministry Secretary and the Transport Commissioners of Delhi, Maharashtra, Telangana and Madhya Pradesh had been formed to look at permits given to black/yellow taxis, radio-cabs and aggregators, among others. The committee will consult stakeholders to form an acceptable taxi-hailing app, and accordingly frame a draft scheme under the Motor Vehicles Act. “The committee is yet to meet,” stated the official.

The Centre’s liberal outlook on surge pricing comes in the backdrop of Karnataka imposing guidelines restricting the practice. Delhi had also reined in surge pricing during the implementation of the odd-even scheme.

Regulating taxi-hailing apps and aggregators is not India’s worry alone. It’s not just India that is grappling with the regulation for taxi aggregators. Recently, the International Transport Forum (ITF) noted that commercial transport apps are popular because they provide an easy, consistent and universally available service.

Policy, it said, should enable innovations that contribute to equitable access, safety, consumer welfare and sustainability. This will likely entail lightening market entry controls and fares regulation for dispatched taxi services. Regulators should avoid creating different categories of service providers.

According to ITF, automated fare data collection, on-board monitoring of vehicle condition, driver behaviour, etc., enable better oversight and delivery on policy goals.

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