Ola violates surge pricing rules in Bengaluru; Karnataka govt cracks whip

By: | Updated: July 12, 2016 7:13 AM

Karnataka’s transport department has sought to revoke the licence it issued to cab aggregator Ola after it found the company guilty of violating the Karnataka On Demand Transportation Technology Aggregator Rules, 2016, reports Prabhu Mallikarjunan in Bengaluru.

olaIn the last few months, both Ola and rival Uber have been directed by various state governments, including those in Delhi and Karnataka, to stop surge pricing.

Karnataka’s transport department has sought to revoke the licence it issued to cab aggregator Ola after it found the company guilty of violating the Karnataka On Demand Transportation Technology Aggregator Rules, 2016, reports Prabhu Mallikarjunan in Bengaluru.

The department has now issued a notice to the company asking why it should not revoke the licence as it found Ola to be violating the new rules by imposing surge pricing and also operating shuttle services in Bengaluru. The department issued the notice on July 5 following complaints from users. Ola has been asked to respond within a week’s time.

Ola did not respond to FE’s queries on the subject.

In the last few months, both Ola and rival Uber have been directed by various state governments, including those in Delhi and Karnataka, to stop surge pricing.

On April 2, the Karnataka state government notified the on-demand cab aggregator rules, which require cab aggregators to obtain a licence under the newly formulated rules and also mandated them to get police verification done for a minimum of 100 drivers to obtain a permit.

The transport department had started a heavy crackdown on Ola and Uber vehicles citing non-compliance and failure to obtain a licence. A total of six companies, including, Ola, Uber, TaxiForSure, Ridz, Welink and Shreyas had applied to the state government for licences.

Having a first-mover advantage, Ola is the leader in this segment with a 50% market share, almost double that of its arch-rival Uber India. According to a report released by consulting firm Redseer, Ola and its subsidiary TaxiForSure account for 61% of the overall market share (50% and 11%, respectively), while Uber has a 26% share.

Ola started operations in India in 2011 and has expanded to over 102 cities, while Uber started operations in 2013 and has a presence only in 26 cities. Ola has about

3.5 lakh cabs on its platform, and Uber has about 2.6 lakh vehicles.

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