Centre caps surge pricing at 1.5X of base fare in new cab aggregator guidelines

The Union Ministry of Road Transport and Highways on Friday issued a set of guidelines governing cab aggregators such as Uber and Ola. The new rules cap maximum surge pricing charged by an aggregator to 1.5 times the base fare while the lower limit which an aggregator can charge has been fixed at 50% of the base fare. 

The guidelines, formulated as part of the Motor Vehicles (Amendment) Act 2019, will serve as a framework for the state governments for issuance of licenses to transport aggregators. 

Transport is both a state and central subject, however, state governments will be required to follow the guidelines while issuing license to aggregators.

Total number of drivers on cab aggregator platforms to be close to 5 lakh, according to market research firm Redseer. Data shared by the firm indicated that the number of cab rides across Ola and Uber, the primary players in the cab aggregation sector in India, has fallen to nearly 30 million for the month of October, as compared to 68 million cab rides a month in January 2020, due to the Covid-19 related restrictions. 

The license will be granted for a period of five years to the cab aggregators, following which they would be required to file for renewal with the concerned department of the state government.

Here are a few key takeaways from the guidelines:

• Cab aggregator apps will be required to display their interface in English and Hindi as primary languages, as well as the language of the state where the official language is not Hindi.
• Any vulnerabilities on the aggregator app will have to be reported to the Indian Computer Emergency Response Team (ICERT) under the Ministry of Electronics and Information Technology.
• The cabs which are a part of a cab aggregator platform will be required to display the signage for ‘taxi’ as per existing norms. City taxis will also be permitted to integrate with the cab aggregator platforms.
• Cab aggregators will be required to ensure that the person accepting the trip is the same as the enlisted driver for every trip
• Only riders with details and KYC on the app can avail of pooling facilities with a limited detour to the route in case of ride sharing. Female passengers can avail ride pooling services only with other female passengers.
• Drivers on the cab aggregator platforms cannot be logged in for an aggregate of 12 hours in a calendar day. The cab aggregators will be required to ensure through in-app mechanisms that drivers who are registered on multiple aggregator platforms do not clock in over 12 hours of driving cumulatively. 
• Drivers on the cab aggregator platform will be required to have a health insurance cover of minimum Rs 5 lakh with base year of 2020-21, which will increase by 5% every year. The drivers will also be given a term insurance for a minimum of Rs 10 lakh with base year of 2020-21. 
• The cab aggregators will be required to pay at least 80% of the fare for each ride to the driver and remaining can be deducted by the aggregator as commission. The state government can charge 2% over and above the fare towards state exchequer.