Ola-Uber Fare Hike Permitted During Traffic Congestion: New Central Guidelines

Flexibility for Fare Increases

The central government has granted permission to app-based cab operators such as Ola and Uber to raise fares during traffic congestion. The Ministry of Road Transport and Highways has released new Motor Vehicle Aggregator Guidelines that detail the same.

Highlights:

  • Companies can raise fares by 50% during regular congestion.
  • In situations of intense congestion, prices can be raised by a maximum of 200% (previously it was limited to 150%).
  • No additional surcharge is permitted for distances up to 3 kilometers.

Ride Cancellation Penalties

The government has made penalties for irrational ride cancellations:

  • If a driver cancels a ride without cause, he will be charged a penalty of 10% of the price, a maximum of ₹100.
  • This fine will be divided between the driver and the platform (such as Ola, Uber, Rapido) equally.
  • If a passenger cancels for no reason, the same applies.

Welfare Measures for Drivers

To ensure driver welfare, new guidelines mandate insurance:

  • Minimum health insurance cover: ₹5 lakh.
  • Minimum term insurance cover: ₹10 lakh.
  • Private motorcycle usage is now permitted for plying passengers.

Context: Bike Taxi Ban in Karnataka

Earlier, Karnataka suspended bike taxi facilities following a High Court order. The court ruled that such services did not fall under the Motor Vehicle Act. The ban was even upheld despite the challenge by companies. This had raised an eyebrow among gig workers. To address this, the central government has now permitted the use of private bikes on regulated terms.

State-Level Authority for Fare Fixing

The guidelines further provide:

  • States may regulate base fares for cars, bike taxis, and other categories.
  • Aggregator platforms may do so if states do not. They are required to notify state authorities.

No Fees for Short Distance Pickup

The regulations make it clear that:

  • In the case of pick up distance less than 3 km, the companies cannot recover dead mileage (driver travel prior to pick up).

Safety Features Made Compulsory

To enhance passenger safety, the regulations now mandate:

  • Vehicle tracking devices in all aggregator taxis.
  • Tracking data should be shared with both the company and state control centers.
  • This helps in responding faster during emergencies.