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Karnataka Government Leans Towards 10% Cap On Convenience Fees Charged by Ride-Hailing Platforms: Report

The state govt approaches the Karnataka High Court to ratify the 10% cap on convinience fee on auto rides charged by ride aggregators

The Karnataka government is looking to approach the Karnataka High Court to ratify the current temporary 10% cap on convenience fees charged by app-based ride-hailing firms, reported Economic Times. The decision comes after the government reportedly received positive feedback from commuters using price-capped autos in Bengaluru.  Why was the interim cap introduced?: Despite the state’s capped base fare of Rs. 30 for a 2-kilometre distance, multiple consumer complaints were raised, with some stating that platforms were charging base fares for auto rides as high as Rs. 100 in Bengaluru. After this, the Transport Department issued an order on October 6th, directing Ola, Uber, and Rapido to stop offering auto rides "with immediate effect". The three platforms then challenged the order at the High Court. On October 14th, it issued an interim order allowing the platforms to resume auto services, while capping convenience fees charged by these platforms to 10% of the fare excluding GST.  Why it matters: As MediaNama previously reported, the regulation of unchecked platform pricing of these rides has seen some Bengaluru consumers benefit from lower prices. Despite some skirmishes, auto drivers also appeared to have been able to book rides despite the ban, and ply customers outside of these platforms too. It is platforms that appear more concerned by the cap—welcoming the interim order, Uber had initially cautioned against the government capping commission and convenience fees in its upcoming pricing policy, suggesting that making the 10% fee permanent would threaten the platform’s operations. These policy developments are also in tandem with reports…

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