Indian Government Caps Fee and Surge Pricing of Ride-Hailing Apps like Uber and Ola

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The Ministry of Road Transport and Highways has issued new guidelines for ride-hailing companies such as Uber and Ola that allow aggregators to charge up to 20 percent fee of the base fare on each ride. Through the new guidelines, 20 percent of the fare will go to the aggregator, while drivers will receive 80 percent of the fare.

Alongside this, the government has capped the surge pricing to 1.5 times the base fare. Surge pricing refers to the increase in ride fares due to high demand from riders while there isn’t a sufficient number of drivers in the area. The guidelines also allow aggregators to charge 50 percent lower than the base fare. The cancelation fee is set to 10 percent of the total fare and does not exceed Rs.100.

“These guidelines will provide a guiding framework to the state governments/UTs to consider for issuance of licenses as well as regulating the business being conducted by such aggregators,” the ministry said.

As ET reports, the guideline permits a maximum of four intra-city ride-sharing trips on a single day and a maximum of 2 inter-city ride-sharing trips per week for vehicles integrated with aggregator apps. In addition, aggregators will have to establish a control room that facilitates 24×7 operations. All vehicles part of the aggregators must be connected to the control room.

The new guidelines also require data generated on ride-hailing apps to be stored on servers in India for a minimum of 3 months and a maximum of 24months. Notably, this data will have to be made accessible to the government as per law. However, customer data will not be disclosed without the written consent of the user.

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