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New taxi guidelines offer a great deal of relief to Ola, Uber

16 December, 2016

The new taxi operations guidelines prepared by the central ministry of road transport and highways provide a crucial breather for taxi aggregators Ola and Uber as they continue experimenting countless methods to achieve profitability in the fast growing cab-hailing market in India.

In its report submitted to the Delhi High Court, the Ministry of Road Transport and Highways strongly recommended removal of restrictions that prevents taxi operators hiking the prices during peak hours. “The committee strongly recommends to avoid unreasonable restrictions that will make taxi operations economically unviable,” it said.

The new guidelines will allow online cab-hailing services such as Ola and Uber to charge up to three times the minimum fare during the day and up to four times between 12 midnight to 5am in morning.
“The committee recommends range bound dynamic pricing to be allowed to effectively match demand and supply. It is felt that the maximum tariff may be permitted up to three times the minimum tariff. To increase the availability of taxis during the night time, the committee recommends that maximum tariff may be allowed up to four times that of minimum tariff from 12 midnight to 5am in the morning,” the report said.

The committee felt removal of such restrictions would ensure adequate supply during peak hours and at night. It also proposed 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.

Additionally, city taxis can be allowed to ply on tech-based aggregator platforms in addition to operating as street hailing taxis, the central ministry of road transport and highways.

“To maximise utilisation of city taxis, they could also be allowed to run through the aggregator’s app-based service platform in addition to their regular street hailing operations. This will potentially enhance the revenue earning capacity of the taxis,” the report said.

According to the new list of recommendations, while operating under aggregators, the requirements for the app-based taxis would be applicable to such taxis and the fares would be charged on the basis of the aggregator’s app.

The ministry recommended that state governments should facilitate unhindered grant of permits for city taxis and All India Permits for Tourist Transport Operators (AITP) without any restrictions on numbers. “Restrictions placed on the number of taxis to be withdrawn, in order to reduce reliance on personalised transport and corresponding load on the parking infrastructure in the cities,” it proposed.

The committee proposed that there should be no restrictions on the choice of the operator or aggregators with regard to composition of the fleet, i.e. deluxe and economy.

The latest recommendations also necessitates taxi aggregators to establish physical presence in the respective state of operations, provide a grievance redressal mechanism, and have emergency response centre to handle SOS alerts by passengers.

It also recommended for seat sharing mechanisms on aggregator-based taxis with express consent of the passengers.

It further said the states should promote bike sharing and e-rickshaws for last mile connectivity. “The State Transport Department may allow two-wheeler taxi permit on the lines similar to those for city taxi. This will offer an economical and convenient last mile connectivity solution to the citizens. It is highly recommended that existing private bikes may be allowed for such transportation in order to facilitate utilisation of idle assets and State Governments may also consider online option to allow private bikes to convert to taxis,” the report said.

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New taxi guidelines offer a great deal of relief to Ola, Uber

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