 "A price band for fares is a must for all: Siddhartha Pahwa")
Siddhartha Pahwa, Chief Executive Officer, Meru Cabs, says the draft Maharashtra City Taxi Rules are a good model for emulation by other states. Edited excerpts of an interview with Sanjay Jog:
What are the implications of the draft rules on the various stakeholders?
The Radio Taxi Association (of which Pahwa is secretary) has been seeking a single law for all taxi operators for long. This is a very progressive step by the Maharashtra government. This will now allow all service providers, including the kaali-peelis (the traditional black and yellow cabs) to embrace technology and focus on quality of service. The consumer will also be significantly benefited; they need various modes of transportation.
What is your comment on the kaali-peeli and radio taxis being included in these rules? What does it mean especially for Meru?
Kaali-peelis being included in the aggregator platform shows the government wants to improve the quality of service, to bee an integral part of the transport solution for the city. Meru welcomes this move and will embrace kaali-peelis on its platform. In fact, we have already developed a solution to so integrate them; as soon as the rules are made official, we will start doing so on the Meru platform.
The rules have set a minimum and maximum fare range for all players. What are the implication on taxi aggregators, especially on those doing surge pricing during peak hours?
A price band for fares is a must for all stakeholders. If there is no maximum limit, aggregators will make super-profits. Every product in India has the MRP (Maximum Retail Price) concept and the same thing is required in the taxi space. The aggregators' argument to let the market place decide fares is completely unfair. Two aggregators are deciding the price, not the driver. It is not marketplace-driven.
The government is aware that the stage is being set for disproportionate profits and has come up with this rule. It is also important to control the discounts being offered to passengers with the intent to kill competition. The Radio Taxi Association believes in healthy competition; discounts given to try new products and bring them into the category is acceptable. However, if the intent of discounts is to eliminate competition and establish a monopoly, this will hurt the sector in the long term. Fares might go up for consumer in the short term but they'll benefit from the new rules in the long term. The cost of having an own car is approximately Rs 30 a km. If the rate will be Rs 15-20 a km, it will continue to benefit the consumer financially, with better convenience.
Are there any detrimental rules in the draft for Meru’s operations in Maharashtra?
Overall, the rules are very progressive and take into account the long-term interest of the segment and all stakeholders. There are a few clarifications needed. The government has to ensure strict compliance with the rules.
Should other states do likewise?
This is certainly the best set of rules we have seen as compared to any other state. A clear thought process and effort have gone in making these rules. The central government should adopt these rules and make it applicable in all states.
