Cabs in Bengaluru will only get costlier with revised uniform rates: ride-hailing firms

On February 3, the Karnataka government fixed uniform fares for all cab aggregators operating in the state. The notification also prevents cab aggregators from introducing surge charges during peak hours.

It classified cabs into three categories based on the cost of the vehicle. For cabs worth less than Rs 10 lakh, the fixed fare for a minimum distance of four km will be Rs 100 and each additional km will cost Rs 24. For vehicles priced between Rs 10-15 lakh, the fixed fare is Rs 115 with each additional km costing Rs 28. Cabs priced at Rs 15 lakh or more will have a fixed fare of Rs 130 for a minimum 4 km distance, with each additional kilometre to cost Rs 32.

In 2021, the Karnataka government had fixed the cab fares at Rs 75 for the first 4 km for small cabs and Rs 150 for luxury cabs for the first 4 km. However, there was no clarity on whether this fare system extended even to cab aggregators.

Officials of ride-hailing apps have said the notification was issued without due consultation with stakeholders and called the move ‘unscientific’. A source from a ride-hailing firm told The Indian Express with the implementation of the revised uniform rates, Bengaluru cab passengers will end up paying higher than they are paying now.

“These changes have been announced without any prior consultation with the industry and defy logic. We also foresee logistical issues with implementation. This will leave both riders and drivers unhappy. Riders will have to pay significantly more to travel between popular locations. In a city like Bengaluru, the result of removing time spent from the equation when calculating fares will mean that drivers will not have an incentive to drive and riders will not find a cab ride in many instances,” said the official from the cab-aggregator firm.

With the implementation of the current notification, the ride-hailing apps have analysed that the consumer would end up paying more even for short distances. For example, a ride between Manyata Tech Park and Banaswadi railway station (6-7 km) saw an increase in fare by over 22 per cent. Meanwhile, a ride between the Bengaluru airport and Electronic City (45-50 km) saw an increase in fare by over 64-72 per cent.

“The revised rates will not be a win-win for drivers and passengers. Given the peak hour traffic, we all know that a mere 5 km distance in Bengaluru would take nearly one hour. If the driver is not getting rewarded in line with the situation, he is more likely to not accept the booking,” said an official from a ride-hailing firm.

Meanwhile, Tanveer Pasha, President, Ola Uber Drivers and Owners Association welcomed the government’s notification. Pasha told The Indian Express, “This (setting uniform cab rates) has been a long-standing demand of the cab drivers and this move by the government will only boost the confidence of drivers and passengers alike. It is a win-win situation for both passengers and drivers who will now be aware that the fares are regulated by the government and there is no room for excess charges.”

“However, whether the cab aggregators will implement the new notification is to be seen. The government has still not given clarity on how they want to crack down on aggregators if they fail to comply with the new rules. In the earlier cases, we have seen how the aggregators got interim protection from the Karnataka High Court, whenever the state government cracked down on them,” said Pasha.

The transport department has also not made it clear how it will ensure the implementation of the new notification and compliance by the aggregators.

Satya Arikutharam, an independent mobility expert, said, “The rates are the maximum and so in a way accommodates and caps the surge fares. The mechanism is not rooted in reality as fare rates based on the price of cars are impractical and unenforceable. The court cases are still pending on the aggregator rules, so this order on fares muddies the water even further and perpetuates regulatory uncertainty. Besides, none of the aggregator taxis have fare meters”.

Michelle Khiangte, a regular cab user said, “Comparing the current revised prices with the old ones tells me that we are going to cough up more for short-distance rides. However, it makes me feel safer when I know that the revised fares are uniform for all cab aggregator players and that they fall under the government’s ambit. Since the government has not allowed surge charging, I can be more alert and can flag it to the authorities when there is a surge fee.”