What did the Central Government Committee recommend about fares in Taxi Aggregators like Ola & Uber?

• Rakesh Dubbudu

The committee constituted by the Ministry of the Road Transport & Highways (MoRTH) to propose guidelines for taxi aggregators like Ola & Uber has submitted its report. The committee recommended that State Transport departments fix and minimum and maximum fare for taxis in the economy segment.

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After Taxi-Aggregators like Ola & Uber ran into regulatory hurdles in multiple states, the Ministry of the Road Transport & Highways (MoRTH), Government of India constituted a committee to propose a Taxi policy guideline to promote urban mobility. The constitution of the committee also followed the directions of Delhi High Court. The committee has now submitted its report and the report has been accepted by MoRTH. The committee in its report proposed guidelines for various areas in the taxi segment. The report also proposed guidelines for aggregators like Ola & Uber.

The State Transport departments may allow Bike sharing

The committee recommended allowing two-wheeler taxi permits like in the four-wheeler segment. It recommended that existing private bikes may be allowed to register themselves as taxis. It has to be noted that Uber flagged off its ‘UberMoto’ services recently in Hyderabad.

Aggregators can aggregate all types of Vehicles

The recommendations state that the aggregators can aggregate all types of vehicles provided the vehicles comply with all the existing regulations. Aggregators can provide services for both intra-city and inter-city services. The committee also recommended that three-wheeler auto-rickshaws can also be brought under aggregation. It is also recommended that the state transport departments allow a service charge to be charged by the aggregators.

Aggregators have to comply with the following rules

The committee recommended that all taxi-aggregators obtain an appropriate license from the State Transport Department under Section 93 of the Motor Vehicles Act, 1988 before they start operations. All the aggregators should comply with the following rules.

• They should have a physical presence /premise in the concerned state.
• They should have a functional grievance redressal system which should be duly publicized.
• They should make available an emergency response centre to handle SOS alerts by passengers as prescribed by the States.
• Aggregators should preserve and provide on demand the data regarding taxi trips and customers for a period specified by the State Transport, Police or any other enforcement authorities as per law.
• Clear display of a photograph of the driver or description of the vehicle (including license plate number) should be provided to the rider on the web or mobile application as well as inside the car, so as to enable verification of the same once the Vehicle arrives with the said driver, details of which has been received via the Aggregator
• They should develop and include a feature in the mobile application that provides riders the ability to share their location with a minimum 2 persons within their safety network.
• They should develop and include a feature in the mobile application that gives riders the ability to contact local police in case of an emergency.
• They should follow the directions / guidelines of the State in terms of maximum duty hours of drivers to promote road safety and to comply with the labour laws.
• Violation of the stipulated rules by the taxi operators/ drivers should be strictly dealt in accordance with law.
• In the event of an incident of a criminal nature involving a trip booked through the aggregator, the aggregator should immediately inform and cooperate with relevant authorities upon lawful request.
• Aggregator Platforms must establish a policy of zero tolerance for discrimination or discriminatory conduct while a driver is working on such platforms. Discriminatory conduct may include:
  • refusal of service
  • using derogatory or harassing language directed at passenger;
  • rating a passenger on the basis of sex, race, caste, creed, religion, or nationality.

• Aggregator Platforms upon receiving a complaint from a passenger containing an allegation that the driver violated the zero-tolerance policy for discrimination immediately suspend the services of such driver, for the duration of the investigation by the Licensee.

 Aggregator Software & Fare Calculation Algorithms should be validated by MEITY

The committee also recommended that the algorithms used for distance and fare calculation etc. should be checked and validated for accuracy. Quality of these software applications should be audited by from Standardisation Testing and Quality Certification(STQC) or any other agency authorised by Ministry of Electronic and Information Technology (MEITY), on a one-time basis.

STQC or other nominated agency of MEITY should validate the attributes used by cab aggregators to calculate the shortest path for any inaccuracy and this validation should be maintained. This is to ensure that the customers are not overcharged.

The committee also recommended that in the interest of security of personal data, the Aggregators should provide options to the consumers whether they want to share the data on their mobiles with the aggregators or not. Express consent of the consumers should be obtained to share the personal data and it should be ensured that all the data is protected by a firewall. However, if any such data is requisitioned by any enforcement agency then the aggregators would be bound to provide the same.

Maximum Tariff for Aggregator based taxis

The committee recommended that the taxis under aggregators should be categorized into the following two segments

• Economy
• Deluxe

The committee recommended that the tariffs of deluxe taxi segment should not be controlled and market dynamics should be allowed to determine the tariffs. But the State Transport Departments may regulate the fares of the taxis in the economy segment. The following rules may be used for fixing the tariff in the economy segment.

• States may fix minimum as well as maximum fares charged by the aggregators. The committee recommended that the maximum tariff may be permitted up to three times the minimum tariff.
• To increase the availability of taxis during night time, Committee recommended that maximum tariff may be allowed up to four times that of minimum tariff from 12 midnight to 5 am in morning.

Alternatively, the committee also recommended that aggregators may be asked to provide the minimum fare that would be charged from the customers and the State Transport Department may fix a multiplier to cap the maximum fare.  While fixing the tariffs, the states may engage the services of transport economists and related experts who would be able to provide a scientific approach to determination of tariffs and permit charges.

NITI Aayog’s divergent views

It has to be noted that the Niti Aayog had expressed divergent views to the committee especially on the tariff front. The views of the Niti Aayog as expressed to the committee are

• The concept of fixing a minimum tariff for taxis has not been supported.
• Any law to fix a minimum fare shall be struck down by Court and it would also be difficult to prosecute /penalise any taxi operator if they were charging below the minimum fare.
• There should not be cap on the surge price, just as there is should be no lower floor price. Market competition should decide the price levels.
• To protect the consumers in emergency situations, there can be a clause to suspend or cap surge during heavy rain, floods or any other emergency situation.
• Does not support the idea of issuing licenses to aggregators and that they should be covered under the existing laws covering IT based platforms
• Supported the idea of pooling / sharing of private cars through appropriate app-based solutions.

Niti Aayog felt that aggregators should be responsible for undertaking due diligence of the vehicles provided through their portal which can include

• Due diligence with respect to vehicle requirements (e.g. appropriate permits, certificates, insurance)
• Due diligence with respect to drivers (driving license, background verification, service provider-driver agreements).

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