App-based services will end surge pricing soon

Zee Media Bureau

New Delhi: App-based taxi aggregators are soon going to fall within the ambit of Motor Vehicles Act and follow all the rules applicable on cab service providers in each state.

Aper Hindustan Times, a group of eight state transport ministers will consider and take a final call on the matter on June 12-13 in Dharmasala.

The Road transport ministry is planning to bring taxi aggregators within the ambit of the Motor vehicles Act under ‘intermediaries’ category, and they will have to abide by taxi fares prescribed by respective states. 

Taxi aggregators like Uber and Ola do not have their own fleet of cabs but work as intermediaries between the cab owner and customer for a fee.

The fares of app-based service providers automatically increase, when the taxi demand is higher than drivers in the vicinity. The surge pricing ensures reliability and availability of cab for those who agree to pay a bit more.

Even though governments in some states have spoken of strict action against surge pricing by app-based taxi providers, but customers are still expected to pay surge-fares in peak demand time.