Rapido: Ola, Uber, Rapido unlikely to stop car services in Bengaluru

Ride-hailing companies such as Uber, Ola and Rapido have been instructed by the Karnataka State Department of Transport to suspend their auto-rickshaw rental services in Bengaluru within three working days, but several have said they plan to approach the government. company executives said in denial. He was charged with inflating fares in one of the country’s largest markets for automated ride-hailing services. The aggregator’s platform is unlikely to go out of business, they said.

Because state law allows tech platforms to aggregate only four-wheelers, state transportation officials deemed the automated ride-hailing service “illegal” and notified the three companies on Thursday, a senior official said. said. In addition, the government also sought clarification on reports that it charged customers more than the state-mandated minimum.

“It is not legal to consolidate cars. Only cars can be consolidated, so we sent a notice,” L Hemanth Kumar, additional commissioner for the transport sector, told ET.

A representative for automated call app Rapido told ET that the company “has no intention of fighting against the law.”

“We will respond to the government within the next three days and work according to what transportation officials tell us,” the person said.

Karnataka’s Transport Department has set a minimum fare of Rs 30 for a car in the state capital. However, the base fare charged by the auto dispatch app may cost up to 100 rupees in total. This includes a convenient fee that can go up to 45 rupees.
, 5% GST “charges customers a final fare of nearly 100 rupees as a base fare for rides up to 4km,” said a company executive.

A Rapido spokesperson said, “All our fares are determined according to fares determined by state governments, and Rapido does not charge additional fees for those fares.”

Uber and Ola declined to comment on queries submitted by ET.

rising fees

The Times of India reported on 6 October that car aggregators are charging about 100 rupees per ride, while the minimum fare in Bengaluru is only 30 rupees.

In the past, ride-hailing companies used to charge a convenient fee of Rs 10-15, but in recent years there has been an increasing trend as these companies focus on improving profitability and unit economics. Uber is a publicly traded company with global mandates to achieve profitability, while Ola has struggled to raise new capital amid a widespread slowdown in late-stage fundraising. I’m here.

“Even when you buy movie tickets, the platform charges convenient fees because you can buy tickets from the convenience of your home. It’s the legal thinking behind it,” said one ride-hailing service. Executive.

Tanveer Pasha, President of the Ola Uber Driver’s and Owner’s Association, said: The Karnataka Automobile and Taxi Federation welcomes the Karnataka government’s move as it allows only cars to be aggregated.

“Auto-rickshaws have their own meter fares and these fares are under ARDO and directed through the District Magistrate of Bangalore City,” he said.

clash with the government

This isn’t the first time ride-hailing companies have faced off against state governments.

In 2020, the Ministry of Roads and Transport has issued a policy draft. It is used as a template for each state to create its own state-level policy.

Delhi became the first state to draft a policy based on the Center’s guidelines. The state government has fine-tuned its policies to suit Delhi’s needs and added regulations on electrification. Successful implementation of this policy could set a precedent for other states to develop similar policies.

Ashish Kundra
major GNCT Delhi’s transport secretary told ET that Delhi has no intention of restricting aggregator services at this time, as aggregator policies are likely to result in necessary regulations.

Rapido faced problems with its bike taxi service with the Karnataka government in 2019. After that, the government launched a bicycle taxi policy that only allowed the use of electric bicycles.

In Maharashtra, the Bombay High Court requires ride-hailing companies to strictly adhere to the standards set out in the 2020 Vehicle Aggregator Guidelines.

Autonomous ride-hailing services have also become famous for ride-hailing apps amid its open-form-factor pandemic, at a time when public transportation was deemed vulnerable to the spread of Covid-19 and had to turn off air conditioning in cars. . .

Ola founder Bhavish Aggarwal, who sees Bengaluru as the largest market for car ride-hailing, has previously said his company’s ride-hailing business is a “very profitable” business.