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-   -   Ola & Uber might suffer ban in Karnataka. EDIT: Ola gets KA License (https://www.team-bhp.com/forum/street-experiences/176649-ola-uber-might-suffer-ban-karnataka-edit-ola-gets-ka-license-6.html)

I agree with your views, earlier cabbies had to drive a minimum of 250-300km for a decent earning, now since the incentives are based on minimum number of trips, they refuse to come on long trips. Cabs in fact can be an effective mode of transport when metro becomes functional on all routes in Bangalore. People can hire a cab to nearest metro station from their home and travel in metro. An efficient public transport system should be an interlink of available options and not destruction of options.

A long post, and a personal opinion, apologies in advance..

The app based taxi aggregators entered the market when the law governing them was not evolved, which they exploited, and by offering professional services at convenient prices, their popularity surged.. What the aggregators, neglected was Section 67(1)(d)(i) of the Motor Vehicles Act, 1988. Section 67 1(d) empowers state governments fix fares (including the maximum and minimum) to prevent uneconomic competition among holders of permits, i.e. the taxis.

Based on the Section 67(1)(d)(i), the Government of Karnataka, issued a notification titled City Taxi (Air Conditioned) Fare on December 05, 2012, fixing the minimum taxi fare at Rs. 80 for 4 kms, and Rs. 19.5 for every km after that. If you go by the notification, this fare, is non-negotiable, it also does not give any space whatsoever for the aggregators to charge below this, or a surge pricing based on the increase in demand.

The question, therefore, is can the Government fix prices? What is the logic behind fixing prices? Dr. Armentano, Assistant Professor of Economics at the University of Connecticut explains as follows: “[a]s long as the price of an article is allowed to fluctuate and match the supply with demand, there will be neither surpluses nor shortages, i.e., the market will be cleared at some equilibrium price.”

The Taxi aggregators’ fares today are less than half of what the Government has fixed, which has helped create a huge demand. Thousands of taxi drivers are dependent on Uber and Ola for their livelihood, and scores of customers have joined this phenomenon. The taxi aggregators’ low fares seems to be one of the reasons for this exponential growth. Because of this increase in demand, Uber can now exercise its right to impose surge pricing at twice, thrice, or four times the normal charges during peak hours. Is that healthy?

Another argument is that the surge pricing lasts only for a few hours in a day, and the commuters still benefit from the low prices for the remaining time. Because the aggregators also offer services such as sharing of taxis among the commuters, price fixing by the Government is hindering the business. Is it?

The fact remains that there must be a legal sanction for any act. Here, the Motor Vehicles Act has empowered the state Governments to fix prices for taxis, and the Government of Karnataka has issued a notification as far back as 2012, before the taxi aggregators reduced/increased their prices. These aggregators are not following the Motor Vehicles Act, or the corresponding notification, therefore, they do not have a legal sanction to either reduce the fares, or increase it during peak hours.

Unless these aggregators challenge Section 67(1)(d)(i), the Motor Vehicles Act, 1988, and get a favorable order, every time we use these taxis and pay the fares as they stand today, we are contributing to this illegal act. How about that!

Having said that, I am big fan of Uber, and use it regularly in Bangalore. I have had multiple arguments with my friends over the legality or the arbitrariness of law. For example the Karnataka's new On Demand Transportation Technology Aggregators Rules 2016 has laid down multiple rules that the aggregators must follow in terms of how the business is run. They seem a little stringent considering that Uber in particular has given so much freedom from traffic to folks in Bangalore, then again, law is law.

In my opinion, in relation to surge pricing, the local RTO can fix the minmum and maximum fare to give a leeway to the aggregators in terms of prices.

I guess we will have to wait for the High Court's decision.

PS: One of the drivers told me that he was able to afford his mother's treatment (roughly Rs. 5 Lakhs), only because of Uber, he said if not for Uber, he would have had to borrow money from people at exorbitant interest rates. He was so grateful...

Latest news in today's paper (TOI):
Uber has promised to stop surge pricing in KA.

This applies to everyone operating a radio taxi. Not only Ola and Uber. There is no mention in the law specifically regarding Ola & Uber.

The transports commissioner has said that they prescribe the maximum the taxi can charge and the minimum customer has to pay. If taxi wants to charge less, since it benefits the customer, they are not bothered. This was in news few months back.

I simply fail to understand why State Governments need to regulate only 'certain' business and not all - I smell Politics!
There is a very good reason why kaali-peelis and similar cabs in other cities have their fares regulated : because they're offered cabs at extremely subsidised pricing (close to half of the actual vehicle price) plus they're also offered vehicles at super-relaxed financial deals.
Uber & Ola are private businesses and don't own vehicles, hence the people who buy their own vehicles purchase it at the actual market rates with no subsidies whatsoever - so why should the Government regulate their earnings?
If the real intention of the Government is to ensure a level playing field, then it also needs to regulate:
- Impose regulations to ensure that private banks also function like Government-owned banks - so customers receive the same level of pathetic services everywhere and private banks don't end up with a huge customer base.
- Regulate private airlines so that they function like Air-India/Indian-Airlines - so that everyone provides the same level of poor service.
- Regulate private hospitals to ensure they function exactly like Government/Municipal hospitals - level playing field you see!
- Prevent students from private schools from studying harder so that their scores are on par with those in Government schools.

Obviously the above is not gonna happen, so why is the Government only after private cab companies?
Whilst I agree that Surge pricing beyond a certain rate is irrational and needs to be controlled, the other conditions that the Government wants Aggregators to adhere to are absolutely unreasonable and have no logic at all.
It's about time that the Government stops interfering with how private businesses function - else they'll kill the economy and scare away foreign investors and businesses.

Regulations for Financial institutions and Banks are already in place.

Regulations for Private airlines i.e. to have maximum fare cap is in pipeline.
This is being done to stop passengers getting looted during festival and emergency situations (like for e.g. during recent Haryana stir).

Regulation of the market is both good and bad. A fine balance is needed between over and under regulation of the market and commodities.:thumbs up

As far as I know, this is being considered only for airlines that get government funding (Air India for the most part).

Regulation is fine. Government has that obligation to the people. Price control (of discretionary purchases) as a matter of regulation - that is where I disagree with you. Cab rides, air travel etc. all fall under discretionary purchases, in my opinion.

I think the key question we need to ask ourselves here is how much regulation we want, and in which aspects of our lives. I'm sure everyone will agree that there needs to be more regulation & implementation when it comes to safety aspects of cab travel, but we have different opinions when it comes to pricing of the same taxi operations.
We want the food prices to be regulated to a certain extent, but taking it too far by bringing in the food security act can be damaging to our economy in the long run, because the food security act will provide (almost) free food grains to the very people who grow our food grains.
We as a society, need to find a reasonable balance between too much state regulation and complete de-regulation. We have plenty of examples in the past, where both the extremes have had catastrophic results.
In my opinion, the cab aggregators and the government (in conjunction with civil society) need to come to a mutually beneficial understanding. I don't see any other way which has a sustainable long term outcome.

Another Notice served to UBER for violating Motor Vehicle Act:

The Gurugram transport department has served second notice to Uber for plying bike taxis with white number plates and also has seized about 50 bikes which is illegal in India.
Also I read in today’s news stating that Uber signs a Terms and conditions document with the bike owners. The document states categorically that the 2 wheeler ride is completely private, Uber is not a party to it and has no responsibility in case of any untoward incident. Uber determines the fare and allows passengers to pay cash or through the Paytm wallet, the entire fare goes to driver directly. Uber does not charge anything to drivers instead gives bike owners ₹50~100 as incentive per ride.:eek:

One thing I do not understand is how Uber is benefited here, how are they able to give incentive without any profit from this business? Where are they getting the money from?:Shockked:

I guess they will eventually attempt to upsell their regular cab services to these bikers and riders, and that they are considering this incentive as a cost of doing business (CAC - "Customer Acquisition Cost").

Post implementation of On-demand Transportation Technology Aggregator Rules 2016 on April 2nd in Karnataka, State transport authority officer has approved OLA's application resulting into the company now becoming the First legalized cab aggregator in the state.

The rule mandates the companies:

• To cap surge pricing
• The fare should not exceed Rs 19.50 per km for an AC car and Rs 14.50/km for non-AC vehicle
• GPS/GPRS enabled monitoring system
• Thermal fare printers
• Register of commuters and trips made
• Yellow sign boards saying Taxi
• Vehicle should have contract carriage permit to be able to ply anywhere in the state on hire

Source : http://auto.economictimes.indiatimes...india/52864305

Highlighted the ones that I think don't make sense. A yellow board vehicle needs to have additional signage indicating that it is a taxi :confused:

Basically they want to make things easier for the original cab companies that do not have an aggregator presence. I sense a lobby here.

I appreciate Surge Pricing, because if I don't need to travel during peak hours I won't, and do if I must. This helps reduce congestion, and also subsidises the off-peak rates. This way I can save quite a bit of money travelling in comfort in off-peak hours.

And even after surge pricing I find these (Uber in particular) more reliable, cheaper and more comfortable than an auto or locally sourced cab.

What is the need for a thermal printed fare? Isn't it a government priority to go paperless? All records of the customer and the cab are available digitally for inspection at any time, so I don't see the point of this.

IMHO it is just a babu kind of decision to be seen as doing something. I would like to understand it if there is sound logic behind these requirements.

I think it makes sense. Flat upfront rates in select cities, should extend pan India soon.

Uber ends surge pricing!

Source:Ola still running cabs illegally, says taxi association

In many states getting the license depends on the 'bakhsheesh'. KA is not particularly clean, nor is UP. I bet the necessary grease was applied to smooth the passage.