1. Ola, Uber say Maharashtra cab aggregators draft rules negative for segment

Ola, Uber say Maharashtra cab aggregators draft rules negative for segment

Cab aggregators like Ola and Uber have opposed the new draft regulation put forward by the Maharashtra government, saying it could have a detrimental impact on them as the proposals have sought a steep hike in the permit fee and changes in the fleet composition.

By: | Bengaluru | Published: November 11, 2016 6:25 AM

Cab aggregators like Ola and Uber have opposed the new draft regulation put forward by the Maharashtra government, saying it could have a detrimental impact on them as the proposals have sought a steep hike in the permit fee and changes in the fleet composition.

The draft regulations as stated in the Maharashtra City Taxi Rules 2016 for cab aggregators have proposed a permit fee of R25,000 for vehicles below the 1400 cc capacity and R2.61 lakh for vehicles above this capacity. Further, it has also proposed that cab aggregators maintain 50% of their fleet with vehicles of 1400 cc and above capacity.

Talking to FE, Ola chief operating officer Pranay Jivrajka said such regulations are detrimental to the cab aggregators as this could result in increased prices for consumers and reduced income for drivers.

For the drivers who operate on the cab aggregators platforms, the new permit fee will become an additional burden. The drivers are given assistance in easier procurement of loans for their vehicles but the permit fee has to be borne by them.

According to market estimates, there are around 40,000 vehicles on the cab aggregators platforms like Ola and Uber in Mumbai city. Any move towards a steep increase in permit fee or regulate the fleet composition could also mean that reduced number of vehicles on the road. It is also estimated that percentage of vehicles with more than 1400 cc in a city like Mumbai is below 10%. Jivrajka said, “This move to regulate fleet composition is like saying that half of the seats in an aircraft should be business class.”

These particular provisions in the draft regulations have been opposed by players like Ola and Uber while submitting their response to these regulations.

The Ola COO said that lowering the permit fee structure would go a long way in benefiting the drivers on its platform.

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