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In Bengaluru, apps must cap fee at 10% of auto fare

The Karnataka High Court, in an interim association on Friday, capped the comfort charge chargeable by app-based aggregators for autorickshaw companies in Bengaluru at 10% of fare.

That is unique of the products and companies tax (GST) to be collected on the overall fare, as earlier than.

Justice MG Shukure Kamal issued the interim course after ride-hailing firms Uber and Ola failed to achieve an understanding with the state transport department over fares. A gathering was held on Thursday in deference to the court docket’s suggestion, however the two sides held their respective positions, sources informed ET.

“We welcome right now’s court docket order,” Uber mentioned in an announcement, including that the course offers legitimacy to the service. “It recognises that auto drivers have the appropriate to function utilizing aggregator platforms. It additionally recognises that platforms like Uber can cost a reserving charge, which permits them to cowl their prices and proceed to offer companies.”

Ola declined to touch upon the excessive court docket’s new directive.

On October 6, the
Karnataka transport department issued a notice to all ride-hailing apps, asking them to cease accepting autorickshaw rides as they had been licensed to supply solely four-wheeled cab companies.

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The authority had additionally acknowledged that ride-hailing apps had been charging minimal fares going as much as Rs 100, whereas the state had capped the bottom fare at Rs 30.

Disagreement over scope of ops

The interim order got here after the petitioners, Uber and Ola, submitted to court docket that aggregator pointers issued by the street transport ministry in November 2020 lined autorickshaws as properly.

The rules had been issued pursuant to an modification to the Motor Automobiles Act, 1988, the earlier 12 months.

The transport division, although, has maintained all alongside that licences issued to petitioners beneath Karnataka On-Demand Transportation Know-how Aggregators Guidelines, 2016, limits the scope of their operation to solely motor cabs.

On Friday, the petitioners additionally prayed for growing the cap on comfort charge to twenty% of fares.

Menace to viability

Whereas welcoming the court docket’s interim verdict, Uber argued in opposition to any potential cap on the fee or comfort charge when the federal government comes up with its new pricing coverage. The ten% cap on fee, if made everlasting, shall be a blow to aggregators, as it is going to carry down their revenue considerably, firm executives informed ET.

Uber, in its assertion, argued that fee caps will “threaten the viability” of the enterprise, “impression the tens of hundreds of auto drivers who depend on it for his or her livelihoods and can end result within the shrinking of this fledgling class.”

“We are going to proceed to have interaction with the federal government to search out methods of regulating the sector in a approach that enables for riders, drivers and platforms to learn from know-how that has really remodeled city mobility,” it mentioned.

Advocate Common Prabhuling Navadgi, showing for the federal government, sought time from the court docket for fixing these charges in accordance with central pointers.

Extra talks

The interim order is anticipated to interrupt the logjam for the time-being and facilitate clean operation of app-based auto rides at regulated fares and expenses.

The Karnataka Excessive Courtroom
asked the state government to hold another round of talks with the ride-hailing companies to try to attain an understanding.

These days, ride-hailing firms Ola, Uber and Rapido have charged a comfort charge of as a lot as Rs 47, after tax, on prime of a Rs 60 base fare, which led to prospects paying above Rs 100 even for a kilometre’s trip. The businesses lowered the bottom to Rs 30 quickly after getting the discover, and later lowered the comfort charge as properly, as ET reported on October 12.

The comfort charge, which matches to aggregators, has largely remained mounted and never been a operate of distance lined. This charge has been a bone of rivalry for the federal government and aggregators.

On Friday, the choose additionally directed the transport division to not take any coercive motion on the app-based companies until the petitions had been disposed of. The court docket informed the app-based companies to use for renewal or contemporary licences, as stands out as the case, beneath the laws and informed the division to think about them in accordance with the legislation.

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