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Ministry warns cab aggregators against ‘unfair’ practices

Both Ola and Uber raised trip fares in major cities last month.

Cab aggregators like Uber, Ola, Meru, and Rapido have been warned of strict action by the Ministry of Consumer Affairs (MCA) conditional on an improvement in their policies, according to a PTI report. The cab aggregators had been summoned by the MCA on May 10 after users complained about the increase in fares, cancellation charges, etc.

The aggregators have been asked to submit information about their policies around surge pricing, data storage, and algorithms. The government may also issue an advisory against unfair practices by cab aggregators, the report added.

Last month, several cab aggregators had hiked their fares in multiple cities by as much as 15-16 percent, citing rising fuel prices. The issue of surge pricing, however, has always been a thorn in the government’s relationship with cab aggregators.

Fares differ from new user to old user

“Complaints on the Jago Grahak Jago [consumer] helpline are just the tip of the iceberg.” — Consumer Affairs Secretary Rohit Kumar Singh after the meeting

Higher fares were being charged by the aggregator apps’ algorithms to older users for the same distance, as compared to new users, Central Consumer Protection Authority (CCPA) Chief Commissioner Nidhi Khare said. This is a plan to lure newer customers and is unfair, Khare added.

Users shoulder costs of cancelled rides: Several users have complained about paying cancellation charges after drivers themselves refuse to accept rides and cancel the trip. This issue was brought up in the meeting, as per the report.

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With price hikes between 12-16%, consumers feel the heat

Cab aggregators Ola and Uber both hiked their fares across major cities by 12-16% last month, according to reports. “We listen to feedback from drivers and understand that the current rise in fuel prices is causing concern. To help cushion drivers from the impact of spike in fuel prices, Uber has raised trip fares in cities such as Delhi-NCR and Kolkata by 12% and in Mumbai and Hyderabad by 15%, respectively,” Nitish Bhushan, head of central operations, Uber India and South Asia, told the Economic Times.

Meanwhile, internal emails revealed that Ola had increased prices on its mini and prime cabs by 16% in Hyderabad. Earlier, cab drivers reportedly went on strike and refused to turn on air conditioning in cabs as a gesture of protest against rising fuel prices and low commissions.

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I cover health technology for MediaNama but, really, love all things tech policy. Always willing to chat with a reader! Reach me at anushka@medianama.com

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