Govt Makes Surge Pricing Legal, Allows Charges Up To Four Times

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In a big relief to ride-hailing apps like Uber and Ola, the center has come up with a new set of guidelines, which among other things, allows surge pricing up to three times the minimum fare during the day and up to four times between midnight and 5 am.

The guidelines created by a committee under the Ministry of Road, Transport and Highways, mulled over issues relating to taxi permits and recommended that the aggregators should be allowed surge or “dynamic” pricing within a certain range to match supply and demand.

The committee ruled that: “Maximum tariff may be allowed up to four times that of minimum tariff from 12 midnight to 5 am in the morning”, adding that pricing variation shouldn’t be “permitted as it may lead to exploitation of consumers in the time of crisis”.

Pranay Jivrajka, the COO of Ola, said in a statement that the revised guidelines from the Ministry of Road Transport and Highways are “progressive and forward-looking” for the transport-hailing industry in India. “This is definitely a significant move in the interest of India’s unique and growing mobility needs, which needs to be addressed holistically,” he added.

The committee also made allocations for bike sharing, urging states to consider allowing converting private bikes to taxis. Both Ola and Uber had launched bike taxis in India last year but shut them down later due to govt regulation. Uber, however, launched its bike taxi service UberMOTO in Hyderabad early this month.

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