The Delhi High Court on Thursday banned surge pricing by app-based taxi aggregators in the national capital region effective August 22 and asked them to comply with the price caps notified by the Delhi government. The court also directed a committee appointed by the Centre to draft a model scheme to govern taxi services across the country, after reviewing the Delhi government’s proposed policy in this regard.
The court’s move comes on the heels of the Centre proposing, in the Motor Vehicles (Amendment) Bill tabled in Parliament, to bring taxi aggregators under federal regulations like other taxi services, a move that could result in fare capping as well. Karnataka had in March cracked down on surge pricing or the practice of levying a surcharge on the fare by aggregators like Ola and Uber when demand for the services is high (prices tend to fall when demand ebbs). Surge pricing and the aggregators’ practice of plying cabs sans city permits led to a backlash from conventional taxi operators and sections of the general public, forcing states like Maharashtra also to consider regulating the fare system of these cab aggregators.
Justice Manmohan said that the model scheme was aimed at removing the prevailing confusion over the norms for taxi services and having a uniform scheme for various categories of taxi services including app-based aggregators, radio taxis, etc. “There is an urgent need to have a seamless and uniform policy for taxi services in the country. This will also offer a level playing field to all taxi operators,” the judge said while passing the order.
The committee formed by the ministry of road transport and highways was also directed to include experts from various fields like the income tax department, Delhi traffic police, environment and the Central Pollution Control Board. The panel has been asked to submit final report in three months. Suggestions on decongestion techniques from the ministry of urban development and advice from NITI Aayog should also be considered while formulating the scheme, the HC stated, adding that all stakeholders would be at liberty to make a representation before the committee.
As part of its proposed policy, which will soon be sent to the Lieutenant Governor Najeeb Jung for approval, the Delhi government has prescribed rates for economy radio taxis at `12.50 per kilometre, `14 per km for non-AC black-and-yellow taxis and `16 per km for AC black-and-yellow top taxi.
Night charges (extra) between 11 pm and 5 am can be 25% of the fare. The notified fare for radio taxis (distinguished by an LCD board on the roof displaying ‘Radio Taxi’) is `23 per km. Additional night charge (25% of the fare) is applicable between 11 pm and 5 am.
Also, the new policy — something in line with that of autos, radio/economy cabs and black-and-yellow taxis — will make it mandatory for cab aggregators operating to charge fares only through meters as prescribed by the transport department.
On Wednesday, the court had said that there was a need for a “good” and “model” law for regulating app-based cab services such as Ola and Uber as it will be helpful to people and would bring in more clarity. Justice Manmohan had hinted at setting up a panel to hear all the stakeholders and then come out with a model law.
The HC was hearing a bunch of cases including one by the Association of Radio Taxis alleging that Ola and Uber are operating without any licence in the capital, overcharging customers and that the government is not doing anything about it, Ola has accused Uber of overcharging and not complying with court orders.
Welcoming the HC’s Thursday order on surge pricing, Rahul Kapani, director, Meru Cabs, said that “this is remarkable and a consecutive win after the verdict in favour of the CNG issue. Surge pricing was effectively a way of black marketing and we are happy that the court has upheld the law of the land and taken a decision in the interest of the customers.
So, both the CNG order and now the regulatory pricing will benefit the consumers and effectively simplify the taxi operations in the country. Now after Delhi and Karnataka, we are hopeful that it will be looked into by other state authorities and end surge pricing in other cities as well.”
n Delhi govt proposes to cap fares of various categories of taxis, including those run by app-based aggregators
n Karnataka had, in March, cracked down on surge pricing by Ola and Uber, the practice of imposing a surcharge on fares when demand is high
n Maharashtra mulling fare regulation for taxi aggregators
n No surge pricing in NCR from Aug 22, firms must comply with the state government’s price caps
n Have a uniform pan-India scheme to govern taxi operations