Surge pricing has been the bane of every cab user in Bengaluru and it looks like it’s here to stay. A committee constituted by the Union Transport Ministry allows cab aggregators impose “range bound dynamic pricing”, which means commuters are going to be shelling out upto four times the regular rate, say Shrinivasa M. and Ranjani Madhavan
They arrive in minutes and take you to your destination with no questions asked. A godsend to stranded passengers, cab aggregators are clearly here to stay. But if passengers expected their problems with fares to disappear once they gave up autos for cabs, they were sadly mistaken as the operators fleeced them in the name of surge pricing, calculated on the basis of demand, time of the ride and so on. As many commuters ended up paying even triple the fare on occasion, the state government stepped in and banned surge pricing by cab aggregators. But it hadn’t reckoned with Uber going to court to challenge the ban and getting a stay on it.
Now that it has, surge pricing has made a comeback of sorts. Complaints about cabs hiking their fares in peak hours, imposing cancellation charges, miscellaneous charges, a toll charge, a night fare, a ride time fare and so on have often been heard. And since the Union transport ministry came out with the recommendations of the committee constituted to suggest taxi policy guidelines a few days ago, the cab aggregators have reportedly become even more emboldened. The reason? The committee has suggested“range bound dynamic pricing to effectively match demand and supply, which could amount to even three times the minimum tariff during the day and upto four times the minimum tariff from 12 midnight to 5 am. Although the state government is not bound by any of this yet and the fate of surcharge pricing in the state still hinges on the high court verdict, some cab aggregators seem to think they have the freedom to do as they please now.
“Going by the high court order, no cab aggregator can introduce surge pricing. Although the Union government has come out with a proposal to allow aggregators to demand upto three times the minimum fare during the day and four times the fare at night, this has not yet been implemented in the state,” points out Mr. Radhakrishna Holla, president of the Bangalore Tourist Taxi Owners Association.
While transport department officials say they have not come across cab aggregators introducing surge pricing when the matter is still pending in court, commuters beg to differ. “Often fares fluctuate based on the traffic volume on the road. In autos, drivers just demand the meter fare. But these cab aggregators have different yardsticks to decide the fare, leaving commuters in confusion,” complains Ms. Sunitha Kumari, a techie.
Responding to such complaints, state transport department officials say if any cab aggregator demands a surcharge, passengers can approach them to lodge a complaint. “Surcharge is prohibited in the state and no one can demand extra,” stresses a senior officer, setting at rest all confusion in the matter.
Shuttle services by private players could hit state agencies
If the report of the committee constituted to propose taxi policy guidelines by the Union transport ministry is fully implemented, the BMTC could face the heat from slick and efficient app- based players, who could show it up for the dinosaur it has become.
The committee's recommendation on state governments allowing shuttle services by private players could hit the transport corporation the worst as app- based operators are bound to offer more frequent, dedicated, timely and quality service, say industry insiders.
“Private players don’t have any responsibilities like offering labour welfare, ensuring job security and so on. But being a state agency, the BMTC is engaged in several social welfare schemes like offering free bus passes to lakhs of people and fare concessions to senior citizens. All this done without any government help, has made BMTC services more expensive. Private players could use this to their advantage,” says an officer of the transport department.
While the government has still to implement the suggestion on shuttle services, a few cab aggregators are already busy expanding their market, according to Mr. Radhakrishna Holla, president of the Bangalore Tourist Taxi Owners' Association. Shuttle services to the airport launched by two private players could hit the BMTC hard as they are offering cheaper fares , he warns.
Other key recommendations by the committee include promoting shared mobility over private vehicle ownership to reduce congestion and pollution in towns and cities , online permits for cab aggregators and avoiding unreasonable restrictions that would make their operations economically unviable, thereby causing inconvenience to people and increasing use of personal vehicles.
Major recommendations of the committee constituted to propose taxi policy guidelines
- Range bound dynamic pricing to be allowed to effectively match demand and supply. Maximum tariff may be permitted upto three times the minimum tariff (during the day) and four times the minimum tariff from 12 midnight to 5 am to ensure adequate supply during peak hours and at night.
- Cab services must be divided into economy and luxury. No fare regulation on luxury cars.
- To provide cheaper travel solutions and to reduce the number of cars on road, sharing of seats may be allowed on aggregator based taxis with express consent of the passengers.
- The states should promote bike sharing and e-rickshaws for last mile connectivity.
Guest column— Cabs can dictate their market, state transport dept, cops powerless: Ramegowda, former Transport Commissioner of Karnataka
Acting on the verdict of the High Court single bench the state government put a cap on surge charging but then Uber approached the double bench. As a result, there is a stay on the previous verdict.
From time to time the fare is set according to the government’s decision. We set it at Rs 14.50 for per kilometer for non-A/C and '19.50 a kilometer for AC cabs. They are not supposed to exceed this ceiling.
However, the Union government has announced in its policy that cabs can surcharge upto four times the basic fare. There is confusion right now because of the difference in the state and Union government’s policies. Currently it is upto the cabs to charge as they want. The transport department or traffic police do not have the power to do anything, until the court comes out with its verdict. It is their market to dictate. They are running a business. If they want to attract customers they can lower the rates too
Considering the competition among the multiple cab services in Bengaluru, the customer has the freedom to pick the service that charges the least. If the fares are arbitrarily decided, the passenger can reject the service. There is no fixed rule about the surcharge as of now. We will have to wait and see until the High Court takes a call.
