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Government caps Uber Ola surge pricing issues fresh guidelines

The Union Road Transport and Highways Ministry on Friday published new guidelines to make ride-hailing apps including Ola, Uber under an administrative structure, in an attempt to make aggregators responsible and accountable for their services while assuring customer safety and driver well-being.

According to the guidelines, an aggregator will be permitted to charge of 50% lower than the base fare and a maximum surge pricing of 1.5 times the base fare. Surge pricing is a result of a demand-supply mismatch meanwhile number of customers trying to book rides exceeds the number of vehicles or drivers accessible. It is also one of the most significant grouses of the consumer.

“This will enable and promote asset utilization which has been the fundamental concept of transport aggregation and also substantiate the dynamic pricing principle, which is pertinent in ensuring asset utilization in accordance with the market forces of demand and supply," the Government said.

Aggregator license can be interrupted if there is - ‘systemic failure’ to ensure the safety of the passenger and the driver, repeated instances of monetary disparities with regard to the fares charged to riders, unjustified demand of surge pricing, ‘severity of financial swindling’, among others.

State governments will have to follow the guidelines declared by the Centre while distributing the license to an aggregator. The recommended guidelines will also ensure, qualification conditions for a being to be an aggregator, agreements with regard to vehicles and drivers, aggregator app and website, manner of fare management, drivers' insurance, evolving thoughts like pooling and ride-sharing in private cars.

The recently amended Motor Vehicles Act has formed a new section of cab aggregators. It identifies and defines aggregators as digital intermediaries or marketplaces, which can be employed by passengers to connect with a driver for transport. The new managerial framework is also assumed to ensure the same. The more comprehensive idea is also to regulate shared mobility, reduce traffic blockage and pollution, the transport ministry said.