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Ola and Uber demand maximuim fare to be raised in Bangalore

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Cab aggregators Ola and Uber have requested the transport department in Karnataka to increase the maximum fare chargeable to the customers to Rs 28 per kilometre reports Economic TimesCurrently, the maximum fare that a cab aggregator can charge a customer is Rs 19. 50 for an air conditioned vehicle and Rs 14.50 for a non-air conditioned vehicle. These fares were fixed in April last year, after taxi aggregators were fleecing customers, with peak time or surge pricing, base ride fares as well as adding ride time fares into their rates.

The Karnataka Transport department has set up a committee that consists of two joint transport commissioner as well as secretary of Bangalore Tourist Taxi Owners Association, Radhakrishna Holla to fix a minimum and maximum fare for the cab aggregators that will make sure that both drivers and customers get a reasonable cost.

To attract more customers onto their platform and in the competition to win over each other, both Ola and Uber started offering rides to customers that were as low as Rs 4 per kilometre. This started making the drivers run into losses as and since the last two months drivers have been going on strikes and seeking government for better wages.

B Dayananda, Transport Commissioner, told MediaNama that the department is awaiting the committee report on the same.

“Regarding the cab aggregators demand, we have set up a committee to look at the fares. Once the committee comes out with a report we will announce and minimum and maximum fares. As of now, the maximum fares will remain same. We are waiting for the committee’s report,” said Dayananda.


Driver’s association against raising maximum fare

However, drivers associations feel that increasing the maximum fare will add to the problems faced by drivers rather than reduce it. “ The reason the maximum fare was first brought in place was because aggregators were fleecing customers. If the fare is increased, these aggregators will again start having dynamic pricing, with lower pricing during non-peak hours and higher during peak hours. This will reduce demand from customers. Finally, it would hurt both the drivers as well as customers, “ said Holla.

Drop in salaries of drivers

FactorDaily showed the average salaries of Ola and Uber drivers dropped by 8% in Q1 2016 from what it was in Q4 2015 mainly due to cut in incentives from the companies. The companies had initially attracted drivers to onboard on their platforms guaranteeing them Rs 1 lakh salary per month. As salaries dropped and more and more taxi’s were onboarded to the platforms, drivers were unable to repay loans.

There have been at least three cases where during strikes drivers have attempted to commit suicide. The drivers have been demanding that they have their original salaries back along with incentives. Drivers in Karnataka and Delhi have also separated from the aggregators and started their own cab hailing apps.   

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  • sketharaman

    “Salary”? I thought Ola and Uber driver partners were contractors, in which case the term “Fee” might be a more appropriate descriptor for their income. As I’m sure you’re aware, Uber is fighting several lawsuits in the US to reiterate that its drivers are not salaried employees but independent contractors. I doubt if it’d agree to take on its drivers into its payroll in India.

  • Satyabrata Rath

    They have no such salaried drivers even they have not a single car owned. In India the law procedures is very slow. Uber cab is already banned in Delhi city but still a numbers of drivers are continuing their trips. So there will some currupt politicians and higher police officers who gave protection to these companies. Many of travel agents, tour operators, taxi operators are facing losses due to these two companies. But no one is there to hear them. The irrelevant prices and offers ruined the traditional market. Banks like SBI declared ‘no loans’ to Ola and uber cabs as the drivers and owners are unable to repay the loan amount due to these unstable prices paid by these two companies. Government should know that there are a big scale of unorganised self employed group depending on this sector. The source for these types of companies is the ‘angle financers’. This types of companies grab the foreign fundings and float them to the market to attract drivers and customers. But this plays a short term game. If there will be a proper guidelinens for rental and hiring business from government then no one can overlook the same and give such irrelevant discounts to disturb the market. Government should take bold steps against the discount and offer based companies.