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Cap surge pricing of online cab aggregators – Maharashtra Govt

uber taxi

The Maharashtra Government has released a draft (pdf) of the City Taxi Scheme 2015, which states that online cab aggregators will come in the same category as radio taxis/traditional cabs, will have capped surge pricing and a limited number of cars on their platform in Mumbai. Note that price regulation happens with autorickshaws as well as traditional taxis, while for the online cab aggregators, this will be the first time.

Cab rates could be between Rs 10 – Rs 25 per km; Bangalore may follow suit
A TOI report from last month states that the revised fare could be in the range of Rs 10-25/km depending on the taxi model. Last week, Bangalore transport commissioner Rame Gowda told Bangalore Mirror that the Karnataka transport department would “put an end to surge pricing practices” after it issued a fixed fare guideline. Note that in March this year, Ola was told by Bangalore regulators that its peak hour surcharge was illegal and asked it to stop using the same.

Uber: If regulation is passed, consumers will have to wait longer, pay more
Following this, Uber has called for its users to sign a petition stating their concerns with cap on the number of taxis which can ply (longer wait times, higher fares), fare regulation “to protect the traditional taxi industry from competition”, LED panels and physical feedback registers among others. According to Uber, the scheme assumes fleet/radio taxis, black and yellow taxis and on-demand digital technology platforms like itself, to be in the same category as commercial vehicles. It asks the government to adopt a separate, ‘progressive regulatory framework’ for companies like Uber.

Fare Rs 13/km for passengers, drivers happy, Uber loses money
As Deepak Shenoy pointed out last week, the passenger is paying Rs 13.5/ km, not the advertised Rs 7/km. For every Rs 100 that users are paying, the Uber driver makes Rs 300, which Uber pays for. Out of this, Uber takes a commission of 25% per ride, still giving the driver Rs 225 out of the Rs 300. Shenoy adds that this is a lousy deal for Uber, losing Rs 1,200 every day per car, depending on the number of rides the driver takes, taking it to Rs 1.5 crore ($ 230,000) per day, $7.5 million losses in a month in Bangalore, not including the marketing, salary or support expenses.

MediaNama’s take: While last week’s advisory had a generally progressive tone, the Maharashtra government’s proposal is not helping anybody’s cause. Yes, traditional taxis and autos are losing business, consumers do find the likes of Ola and Uber better, but that does not warrant a cap on the number of vehicles online cab aggregators can have, like there isn’t for  the number of autos or traditional taxis plying in the city. These are indications that consumer choice will be restricted, and everybody knows the refusal they’ve faced from autos and traditional taxis. Some opinions (here and here) do state that surge pricing is good, however that remains a mixed bag, given the government’s control on the number of vehicles aggregators will be allowed to ply. We’re also not sure why it wants the taxis to display “available” and “busy” signs on the car’s top (also, we’re not in the 1970s anymore). The progressive part, however, states that aggregators should employ as many women as is feasible, which we definitely think is a good move.

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Also read: 

– Uber Bangalore office vandalised by drivers protesting incentive cuts

– Timeline of regulation issues and passenger safety (after the Delhi rape case) here.

**

From last week’s online cab aggregators’ advisory, here’s what’s new in the Maharashtra Government’s draft:

  1. aggregators must register vehicles before plying
  2. Passenger luggage should be secure and protected against rains
  3. GPS/GPRS (yes, the government cannot distinguish between GPS and GPRS) device in the car
  4. Fleet Taxi Service Scheme 2006, Phone/Fleet Taxi Scheme 2010 and Call Taxi Scheme 2010 will be merged under City Taxi Scheme 2015, applicable for Mumbai and may be extended to the rest of the state
  5. Licensee needs to be a company registered under The Companies Act, 1956, mandated to provide public transport services
  6. Licensee should maintain a minimum fleet of 1,000 and maximum 4,000 taxis, either owned or through an agreement with individual taxi permit holders. Maximum 2,500 permits will be issued to a licensee in the first phase
  7. The car should not have less than 980 CC engine capacity, not more than 7 seats (Driver included); open top, non-hard top or fiber top vehicles are not allowed
  8. The car should have a temperature control device with a working electronic digital fare meter on the dashboard
  9. Should run on petrol/CNG/LPG/Hybrid/Electrical
  10. Taxi permit should be displayed prominently
  11. Colour of the taxi should be approved
  12. LED display panel visible from front and rear to indicate if it is available (green) or occupied (red).
  13. Should be replaced by a new vehicle on completing 20 years
  14. RTO Helpline number, police helpline and women’s helpline should be displayed prominently
  15. No tinted glass or curtains
  16. Feedback register accessible to the passenger
  17. Owner can convert taxi into a private category vehicle
  18. Licensee should provide taxi services round the clock
  19. Licensee should hire as many women as is feasible
  20. Refresher training programs for drivers at least once a year and should be documented
  21. Application of license should accompany Rs 100,000 as processing fees
  22. Rs 25,000 fees for each permit grant, 5 year license will be granted upon furnishing bank guarantee of Rs 50 lakhs valid for 5.5 years, drawn in the RTO’s favour
  23. Fare to be decided as per cost of the vehicle and engine capacity
  24. Licensee should have 250 taxis at the time of grant of license, 500 taxis within 3 months after the grant, 1,000 taxis within 6 months and the rest in 9 months.

Image Credit: Flickr user Jason Newport

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Written By

I'm a MediaNama alumna from 2015-16 (remember TinyOwl?) now back to cover e-services like food and grocery delivery, app based transport and policies, platforms and media in India.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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