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Surge pricing can’t exceed 1.5 times base fare; floor on discounts

The government has mandated that drivers of cab aggregators get at least 80 per cent of the income earned from a ride, with the remaining going into a fund of the aggregator.

By: ENS Economic Bureau | New Delhi | Updated: November 28, 2020 12:42:29 am
The guidelines aim to establish a regulatory framework for aggregators to ensure that the they are accountable for operations executed by them, the Ministry of Road Transport & Highways (MoRTH) said in a statement. (Express photo by Ravi Kanojia/File)

The Centre issued Motor Vehicle Aggregator Guidelines on Friday with the aim to regulate cab aggregators. These will impact app-based transport services by capping “surge price” to 1.5 times the base fare as well as putting a floor on the discounts to 50 per cent of the base fare.

The 26-page guidelines, issued as part of the Motor Vehicles Act, 2019, stipulate that Rs 25-30 will be the base fare in states where the fare has not been determined by the local government. The base fare varies from state to state and local governments need to fix base fare for other modes of transport aggregated by such apps, for instance, bikes.

The guidelines aim to establish a regulatory framework for aggregators to ensure that the they are accountable for operations executed by them, the Ministry of Road Transport & Highways (MoRTH) said in a statement.

“The Motor Vehicles Act, 1988 has been amended by the Motor Vehicles Amendment Act, 2019 to include the definition of the term ‘aggregator’,” it said. Prior to the amendment, the regulation of aggregators was not available within the definition of the law.

The government has also mandated that drivers of these aggregators get at least 80 per cent of the income earned from a ride, with the remaining going into a fund of the aggregator.

As per the guidelines, the licence issued by a state government is a pre-requisite for permitting business operations by the aggregator. In order to ensure compliance with licence requirements the Act stipulates penalties under “Section 93 of the Act.”

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