1. Odd that govt does little to prevent price gouging by autos/taxis, but targets surge pricing by Uber, Ola

Odd that govt does little to prevent price gouging by autos/taxis, but targets surge pricing by Uber, Ola

That’s the problem with the Karnataka Ola-Uber rules

By: | Updated: November 12, 2016 7:23 AM
Karnataka HC has upheld most clauses in the new aggregator rules which fail to appreciate that services like Ola and Uber are not those of taxi aggregator. (PTI) Karnataka HC has upheld most clauses in the new aggregator rules which fail to appreciate that services like Ola and Uber are not those of taxi aggregator. (PTI)

If the plans of various governments, both at the Centre as well as at the level of the states, to regulate the fares by capping the amount of surge pricing that can be allowed—offered by taxi services like Ola and Uber weren’t bad enough, the Karnataka government had even put in rules stipulating the minimum number of taxis that these firms should own. Just recently, the Karnataka High Court has upheld most clauses in the new aggregator rules which, in a nutshell, fail to appreciate that services like Ola and Uber are not those of taxi aggregators, they are akin to a taxi-stand from where customers can hire taxis—in this case, through a mobile app. While the rules about the taxi drivers needing to have a working knowledge of Kannada may seem oppressive—certainly the ones about drivers being residents for at least two years fall in this category—this makes sense from the point of view of passenger comfort. The rule that each Ola-Uber type firm must own at least 100 taxis, however, goes against their business model which is centred around them offering a software-based service and not ownership of taxis.

That states like Karnataka should be trying to get market-places like Ola and Uber to own taxi-fleets is ironic given what the Centre is trying to do with other market-places like Amazon and Flipkart. While these marketplaces owned some of the vendors—like Cloudtail—who sold goods on their platform, and also paid for the hefty discounts offered by to customers, the Centre has put in rules placing a maximum share of sales that can come from affiliates like Cloudtail and has also asked these market-places not to fund discounts. Considering how the Olas and Ubers add considerably to the public transport pool, and have both lowered commuter costs and added to convenience, it is unfortunate various governments should be trying to put hurdles in their way, simply because existing taxi operators are feeling threatened. Odder still, especially in places like Delhi, that while the government does precious little to prevent price-gouging by existing fleets of autos and taxis, it feels surge pricing by Ola-Uber is anti-consumer.

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