Jugnoo

Hyperlocal delivery and auto rickshaw aggregator Jugnoo, possibly the only autorickshaw aggregator using surge pricing, has suspended its surge pricing in Delhi from 22-30 April (odd-even scheme) “grudgingly, bowing down to government policies.”

The company’s press release said, and I quote, “Standing firm on his stance” Samar Singla, the founder and CEO of Jugnoo said, “Surge pricing is a standard practice across different industries like airlines and movie ticket bookings, app based transport aggregators are not doing anything beyond comprehension. They’re catering to the needs of the public, while adding to their ROIs (returns on investments) by surcharging during peak hours only. Bearing in mind the commotion ensued by it and the upheaval being experienced by the transport aggregator ecosystem, we decided to remove our surcharges.”

Singla “elucidates further”, “Surcharging is based on demand and supply, which is the backbone of a market economy…Higher the price, lower the demand, helps prioritising travel, which means only a person really needing the service will pay the surged price and rest will find other ways. We firmly believe that surcharge is a part of the business model and that permanently banning it will negatively impact companies like ours. A better way to handle the situation would be to put a cap on the surge amount.”

If you know of other non-cab transport companies using surge pricing, do let us know in the comments below.

Delhi Government bans surge pricing: Jugnoo follows in the footsteps of have Ola and Uber who ‘temporarily suspended peak and surge pricing’ in Delhi NCR, following Delhi government’s announcement that it would take strict action, including impound cabs and cancellation of permits, against those who would flout government rules.

Also read: Why Magic Sewa filed a petition against Ola & Uber for surge pricing

After that, Delhi’s CM Arvind Kejriwal also tweeted that surge pricing will not be allowed after the second odd-even project (15-30 April) is complete.

MediaNama’s take: We’ve said before that suspending surge pricing/impounding vehicles will not fix the existing problems of autorickshaw drivers charging fares on a whim and refusing rides, merely because they didn’t go to certain areas. In this regard, Mumbai has a more structured approach of where which vehicles ply and which don’t, although I am unaware of the overcharging problem there. Surge pricing doesn’t always ‘solve the problem’ of transportation; as Singla points out “it helps prioritising travel, which means only a person really needing the service will pay the surged price and rest will find other ways.”