You must read this before accepting another surge pricing from Ola and Uber

Lately, there has been huge confusion surrounding surge pricing of cab rides in India and the advent of numerous taxi aggregators entering the market. Ola and Uber advertises themselves to be one of the cheapest taxi service providers with fares as low as Rs. 7/km, however, one ends up paying as much as Rs. 37/km with surge pricing. And customers have no other choice but to pay. Little do they know that in 2013 the government has specified a fixed fare of Rs. 12.50 for economic radio taxis and Rs. 23 for other radio taxis, in addition to night charges!

Hence, Magic Sewa, a transport start-up with an all-sedan fleet of 100% CNG taxis, has filed a petition against surge prices and compliance of government notified fares was heard on Friday last week by Justice Midha.

“We had filed the petition for the enforcement of fares as notified by the government of Delhi and against surge pricing, both being violation of section 67 of the Motor Vehicles Act, 1988,” said Rakesh Agarwal, Director & CEO, Magic Sewa.

If an autorickshaw overcharges even by Rs.10, it has to pay a fine of Rs.5,000 but the Unlicensed Taxi Aggregators are charging as high as 3 times the prescribed fares but still no action is being taken against them even after numerous complaints.

Section 67 also says that a taxi cannot charge lower than prescribed fare because it will cause uneconomic competition among holders of permits. However, Unlicensed Taxi Aggregators routinely advertise fare as low as 40% of the government notified fares.

“But they often manipulate the figures in such a way that a passenger ends up paying 4-5 times as much,” he said.

Ola declined to comment. We are awaiting Uber's response.

The court directed Delhi Government to file a status report. This essentially means two things. One, if it is true that nothing lower or higher than prescribed fares can be charged. Two, if it is true that Unlicensed Taxi Aggregators are violating the law and government notified fares through the mechanism of surge pricing and manipulative fares.

The matter will be heard on 18th April.

(Image credits: indiatimes)