App-based Taxi Services to be Brought Under Regulatory Network

The biggest complaint amongst app-based taxi service users is of high fares when the demand is high. To save the customers, the cabinet agreed to bring these services under the regulatory network that will allow the state governments to check arbitrary charging. Taxi aggregators like Uber and Ola will no longer be able to raise fares randomly. If found violating, they can face a fine of up to Rs. 2 lakh.
“Once there is a fare cap, aggregators will have to keep the surge pricing within the range that has been fixed,” a road ministry official said. Aggregators have been defined as “a digital intermediary or marketplace for a passenger to connect with a driver for the purpose of transportation” under the Motor Vehicle (Amendment) Bill, 2016.
According to rough estimates, aggregator service account for five percent of Rs. 59,720 crore taxi business in India. Once brought under the motor act, the aggregators will have to adhere to fares prescribed by the government. Violation of licensing norms will invite a fine of up to Rs. 1 lakh, the cabinet decided while approving several changes to the motor act.