 "Ola, Uber suspend surge pricing in Delhi")
Monday turned out to be a bad day for Uber and Ola as the Delhi High Court and the Delhi government's strict stance forced the two cab aggregators to suspend surge pricing, at least temporarily.
The surge pricing, as the cab aggregators call it, kicks in whenever demand is more than the supply. It can go up to four times the normal fare.
Read more from our special coverage on "ODD-EVEN SCHEME"
These companies claim that the surge in cab fares is not controlled manually, but by an algorithm which decides the price according to the demand.
The Delhi High Court on Monday said that if Ola or Uber are advertising low fares and then charging high fares, the government must take action against them. The court further said that the government must implement its own rules so that the people are not made to suffer by the taxi operators.
Soon after this, the transport department of Delhi said it has received complaints about some taxis charging customers more than the prescribed fares.
"The notified fares in the National Capital Territory of Delhi are Rs 12.50 per km for Economy Radio Taxis and Rs 14.00 per km and Rs 16.00 per km for non-AC & AC Black and Yellow Top Taxis respectively. The notified fare of Radio Taxi cabs (distinguished by an LCD board on roof top displaying "Radio Taxi") is Rs 23 per km. Additional night charges (25 percent of the fare) are applicable during 11 pm to 5 pm," the transport department stated.
It further said if any taxi is found to be overcharging, the Delhi government will take strict action, including cancellation of permit and impounding of the vehicle.
Irked by the state government's decision, Uber said, given the threat of the Delhi government to cancel permits and impound vehicles, it is "temporarily suspending surge in Delhi with immediate effect".
It went on to justify surge as a way of ensuring smooth service without which Uber might become unreliable. "Uber regularly does surge pricing when demand outstrips supply. Remember, we do not own cars nor do we employ drivers. Higher prices are required in order to get cars on the road and keep them on the road during the busiest times. This maximises the number of trips and minimises the number of people stranded. The drivers have other options as well. In short, without surge pricing, there would be no car available when people need it," said Gagan Bhatia, general manager, Uber North.
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He further said that 92 per cent of the trips in Delhi happened on regular fares, during the first phase of the odd-even scheme. "Not surging is saying we should be just like a taxi and be unreliable when people need us the most. These are outcomes that take choices away from the consumer and make it harder to get around cities - these are outcomes that we put a lot of hard work in to avoid so that at least you have the choice if you want one," Bhatia said.
Ola, on the other hand, gave a much more subdued reaction. "To make government's odd-even initiative a success, Ola has temporarily pulled out peak pricing in Delhi-National Capital Region. We have also rolled out an on-ground campaign where volunteers are spreading the message of ride-sharing and car-pooling in support of the scheme," said Deep Singh, business head-North, Ola.
