Mobility

Auto apps and the art of innovating around the regulatory edges

Pranav Balakrishnan

November 06, 2023 | 9 Min Read

Through features like tipping or differentiated service tiers, the likes of Rapido and Namma Yatri appear to have circumvented government-prescribed auto fares. While the legality of these offerings may be dubious, their effectiveness is not

Key Takeaways

Rapido recently launched a pricier auto service called Auto Plus, which has drawn the ire of Karnataka transport officials

Rapido and Namma Yatri also encourage riders to offer “tips” to increase their chances of getting a ride

Both seem to be workarounds to fix the challenge of low ride acceptance in Bengaluru and other big markets

Not only does this potentially hit the wallets of customers, but it also puts bigger players like Uber and Ola on the backfoot

Last week, ride-hailing company Rapido introduced Auto Plus—a new, pricier auto service—in Bengaluru. The Swiggy-backed company’s latest offering promises customers zero ride cancellations, charging a 25% premium over the regular fare for the privilege.

The move has already drawn the ire of the Karnataka government. Hemanth L, the state’s additional transport secretary, immediately called the service illegal since the auto service was priced higher than government-mandated fares.

A senior source associated with Rapido insists that the new service does not flout the law. They claimed that Auto Plus is simply a convenience feature—in the same vein as, say, Ola Prime Plus—wherein highly-rated drivers are assigned to customers. “It is completely optional for both the drivers and the customers,” they said. “Also, it is not that the driver has no option to cancel. They can cancel if they want, but the rate of cancellation will be extremely low.”

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