Karnataka government today issued showcause notices to Ola and Uber cabs for introducing dynamic pricing in peak hours and sought an explanation on why they charge fares on time base and not kilometre base,as per rules.
The transport department issued the notices, asking them to explain within seven days why they violated the 'Karnataka On-demand Transportation Technology Rules, 2016', promulgated for web based taxi services.
One of the rules said no fare shall be collected on the basis of time and only kilometre based fare should be levied to the commuters.
However, the two major cab aggregators violated the rules, compelling the government to serve notices to them, it said in a press note.
Dynamic pricing, also referred to as surge pricing, is a strategy where businesses set flexible prices for products or service based on current market demands.