Fare play: Pricing policies threaten to derail aggregators’ auto ambitions

Fare play: Pricing policies threaten to derail aggregators’ auto ambitions

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Bhumika Khatri

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Aditi Shrivastava

154 reads
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Bhumika Khatri

19 reads
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Aditi Shrivastava

154 reads

Last week, the Karnataka government termed the auto services of Ola, Uber, and Rapido as illegal after receiving complaints about their pricing methods. With autos gaining in popularity post the pandemic, platforms must find a middle ground on pricing or risk losing their biggest growth engine

October 12, 2022

7 MINS READ

For some months now, customer irritation about auto fares on ride-hailing platforms has been simmering. Matters eventually reached a head when Bangalore South MP Tejasvi Surya took up the matter. On October 6, Surya wrote to Karnataka Chief Minister Basavaraj Bommai, urging him to regulate auto-rickshaw fares. He stated that ride-hailing firms were charging a minimum fare of Rs 100—over 3X the base fare of Rs 30 for two kilometres stipulated by the Karnataka government.

The situation has escalated rapidly since. The Karnataka Transport and Road Safety Department issued a notice to ride-hailing platforms, alleging that their autorickshaw operations were illegal. The notice went on to order that all such operations be immediately shuttered and that fares shouldn’t exceed those set by the government.

The days following this notification have seen a flurry of action and reaction. Traffic police impounded autos that used aggregator platforms for bookings, auto drivers held protests over what they saw as harassment, and platforms made no admission of wrongdoing but appear to have slashed fares significantly.

Despite fares falling, however, the Karnataka government hasn’t softened its stance. As of October 12, autos on aggregator platforms are illegal. Aggregators will be fined Rs 5,000 for each auto that operates in contravention of the government order. Ride-hailing platforms, meanwhile, are understood to have filed an application to formalise the aggregation of autos while largely adhering to the government’s fare mandates.

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