Karnataka police to deal with Uber, Ola surge pricing

The Karnataka government has called users in Bengaluru to lodge complaints with the police if they find cab aggregators such as Uber and Ola charging fares higher than the prescribed limit, as it looks to combat surge pricing.

Karnataka was the first state to regulate cab aggregators and had restricted the players from charging more than Rs 19.50 a km. Uber, which had wanted the rules made by the state quashed, has been directed to suspend surge pricing by the Karnataka High Court until its verdict. The HC, which heard Uber's appeal, has reserved its order. Uber had called the move anti-technology and unconstitutional, while rival Ola had secured a licence after accepting government restrictions.
 

"All passengers who have been affected by surge pricing can go to the nearest police station and lodge a complaint against Uber. A FIR will be registered and action taken," said H G Kumar, commissioner of transport for Karnataka.

Uber introduced upfront pricing in June this year as a way to show customers the fares they would be paying before they agreed to book a ride on its platform. The move was aimed at taking out the vagaries of surge pricing that often led to customers paying a lot more than they had estimated.

"All fares on Uber are shown upfront and are within government prescribed maximum fares. In the event a rider is ever charged over the government prescribed fares, we proactively refund the excess amount within 72 hours," Uber said in an email response.

In Bengaluru, one of Uber's largest and most important markets in India, the company has been surging prices for rides veiled behind upfront pricing. However, the company claimed it abides by the court order and limits the surge to the maximum state prescribed fares. "They have not informed us (about surging rides) and even if they do inform us, they will not be allowed to do so. We will seize and detain their vehicles (vehicles that ply on their platform) if we come to know that they have reintroduced surge pricing," added Kumar.

Ola, too, has been surging prices of rides in Bengaluru through a method they call "low-peak pricing". The mechanism, Ola says, does not allow for the fare to exceed the state government mandated fares, hence the appropriately named mechanism.

Both Uber and Ola have base fares that leave them with room to surge prices of rides. With an average ride in a hatchback costing Rs 6-8 on either platforms, prices can be increased nearly three times without violating the law. While Ola has been more accepting of government restrictions, Uber has called it a bad move and 'anti-technology'.