Uber, Ola respond to Karnataka govt notice, say fares comply with rules

App-based mobility players Uber and Ola have responded to the Karnataka government after it declared their auto-rickshaw services “illegal”, following multiple complaints of overcharging, according to sources. Uber and Ola have told the government that they have complied with the rules and reduced their minimum auto fare for the first two km back to Rs 30.

Mobility players such as Ola, Uber, and Rapido had been asked to discontinue their auto-rickshaw services in Bengaluru in three days. The state transport department had issued notices to these companies on Thursday.

The issue rose when several commuters registered complaints with the transport department about Ola and Uber charging a minimum of Rs 100, even if the travel distance is less than two kilometres (km). The minimum auto fare in Bengaluru is fixed at Rs 30 for the first two km and Rs 15 for every km thereafter.

“Ola, Uber submitted their response to the transport department last evening. No one has shut operations,” said an industry source. “All aggregators have gone back to the government mandated fares. This means a one-km trip would cost Rs 70, which includes basic fare of Rs 30 and convenience fee of Rs 40, which remains same for longer trips as well.”

The notice said the provision of auto-rickshaw services has been directed to be discontinued; it asked these ride aggregators not to charge passengers more than the rate prescribed by the government.

Uber and Ola didn’t respond related to the query on this issue.

According to government statistics, 40 per cent (51,900 out of 130,000 auto drivers) have recalibrated their meters till Feb 2022. Customers also have complained that they keep facing the challenges to commute as many auto drivers don’t go by meters on offline trips. As per government mandate, the auto fares become 1.5x between 10 p.m, and 6 a.m. Uber and Ola officials told the government that it is much more difficult for customers to get auto drivers to go by meters on offline trips, according to sources. They have told them that ‘no haggling, fixed price, and door-step pick-ups’ are the benefits of app-based rides.

Karnataka Transport Minister B Sriramulu on Saturday reportedly said he has directed officials to impound auto-rickshaws that are still being operated by ride-hailing companies despite a ban by the state government. His orders came after complaints regarding app-based mobility players were still operating autorickshaw services, despite Karnataka transport department had dubbed these services “illegal” under the On-Demand Transportation Technology Act, 2016. Sriramulu had said that he would decide the next course of action in a couple of days.

These mobility players were granted licences based on the Act and its rules do not apply to auto-rickshaws. However there are no aggregator rules yet for the auto-rickshaws and once these rules are formed then this sector can be regulated, which would take its own due course of time, according to the industry sources. They said that offline auto trips and online trips cannot have the same yardstick as models are different.

Industry sources said that a ban on the online auto-rickshaw services provided by the mobility players would negatively impact the Rs 100 crore revenue that the sector (online) provides to the government per year from Bengaluru alone. They said auto-rickshaws booked offline often charge more and are less reliable. “In the absence of strong public transport like buses and metro, daily commutes will get impacted,” said a person familiar with the matter.

Auto fares on any trip booked online in Bengaluru consist of various components. These include base fare and per km fare (mandated by the government) and a booking and convenience fee charged by the aggregator. The issue had risen when the minimum fare on a trip rose from Rs 30 to Rs 60 to incentivise drivers for pick-ups in light of rising fuel prices. “Now that the status quo is restored, drivers will lose out on income,” said an industry source.