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Commuters in Bengaluru fret as state government, ride hailing firms wrangle over auto fares

The transport department and cab aggregators are locked in a legal battle over fair pricing mechanism for auto rickshaw services

The autorickshaw drivers who want to sign up for prepaid auto services at metro stations can do so, by registering with the BMRCL. (file)

A tussle between the transport department and cab aggregators over auto rickshaw fares has left commuters in Bengaluru in the lurch. The city, also known as the IT capital of India, is home to millions of working professionals who use ride hailing services such as Ola, Uber and Rapido to travel to work everyday.

On October 11, many commuters had to frantically look for alternative transport after the government barred ride hailing services from listing auto rickshaw rides on their platforms.

The transport department acted against Uber and Ola for charging more than the minimum fare fixed by the government for auto rides. The ban also kicked in because the cab aggregators, including bike aggregator Rapido, did not have the license to operate auto services as per The Karnataka On-demand Transportation Technology Aggregators Rules, 2016.

While the government has fixed the base fare for auto rickshaws at Rs 30 for the first two kilometers, ride hailing apps charged more than double the amount with minimum fares soaring during peak demand.

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Several passengers took to social media to flag the surge pricing mechanism of such apps, drawing the attention of the transport department, which later barred the apps from providing auto services until they complied with the state’s aggregator rules, and also ordered seizure of auto rickshaws that accepted Ola and Uber bookings. Auto drivers protested and demanded a ban on ride hailing apps after an auto rickshaw was impounded in Jayanagar.

The Karnataka High Court on October 14 granted interim relief to Ola, Uber and Rapido, directing the state government to not take any ‘coercive’ steps against the companies until a fair pricing mechanism for auto services is in place.

The court allowed the cab aggregators to temporarily operate auto services with a base fare as per government rules (Rs 30) and also gave them the freedom to levy an extra 10 percent as service charge plus applicable taxes (GST).

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The court also directed the transport department to convene meetings with all stakeholders including auto drivers’ unions, cab aggregator representatives and the general public to discuss and arrive at a conclusive solution on fair pricing mechanism.

While the auto drivers’ unions have demanded a complete ban on cab aggregators and requested the government to launch their own ride hailing app, the aggregators have proposed an increase in the service charge to 20 percent along with a platform fee for their services.

Urban mobility experts believe that the government’s inaction coupled with court proceedings in deciding the legality of ride hailing services for auto rickshaws has led to a state of confusion and frustration among the auto driver community and passengers alike.

Why and how the row started

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The controversy dates back to 2016 when ride hailing companies appealed in the Karnataka High Court against The Karnataka On-demand Transportation Technology Aggregators Rules, 2016, arguing that the ride hailing apps were governed under the IT Act and hence the aggregator rules did not apply to them. They also alleged that the aggregator rules were ‘unconstitutional’.

However, in its judgement, the court held certain sections of the aggregator rules as constitutionally valid and directed the state government to give a month’s time to the petitioner to comply with the rules. Later, the ride hailing firms filed another petition challenging certain requirements under the rules such as the inclusion of a panic button in the vehicle and the eligibility of drivers among others, for which the high court is yet to schedule a hearing.

The interim order passed by the high court last month also refers to the judgement of November 2016, stating that the constitutional validity of Aggregator Rules 2016 is still a ‘pending consideration’.

The counsel representing the aggregators argued that auto rickshaws fall under the category of motor cab – a point contested by the government – by referring to the definition of ‘motor cab’ and ‘contract carriage’ as motor vehicles constructed, adapted or used to carry not more than six passengers excluding the driver for hire or reward. The aggregators also referred to the Centre’s Motor Vehicles Aggregator Guidelines 2020, which states that ‘the vehicles that may be integrated by the Aggregator shall include all motor vehicles under the Act and e-rickshaw.’

Why the government failed to act against ride hailing firms

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A senior transport official told The Indian Express that the aggregators continued to operate by using the legal immunity provided by the November 2016 order of the high court, which states that no coercive action should be taken by the government against aggregators until they comply with the rules.

“However, when the pandemic hit, all businesses including auto services were shut for nearly two years. The license of the aggregators had expired in 2021 and post pandemic, they started surge pricing and violating government norms. They also operated illegally for months despite the government reminding them repeatedly to mend their ways and renew their license. This is why the ban on auto services provided by ride hailing apps kicked in on October 7. But the high court has granted them interim relief once again, stressing that no action should be initiated against the aggregators.”

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While the high court has allowed the cab aggregators to levy a service charge of 10 percent as against 20 percent proposed by them, the government slashed the rate to 5 percent on Friday.

What the stakeholders say

Satya Arikutharam, an independent mobility expert, called the government’s decision to force the aggregators to operate at just 5 percent service charge ‘laughable’. “This decision by the government is purely unscientific and impractical. A service charge of 5 percent will not cover the dead mileage of the auto driver. For the aggregators, there’ll be little scope to gain a reasonable margin,” he said.

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Arikutharam suggested that the state government should adopt the Centre’s Motor Vehicle Aggregator Guidelines 2020. The guidelines recommend fixing the fare for 3 kilometers as the minimum fare for rides booked through apps. Based on the current rates in Bengaluru, the base minimum auto rickshaw fare for rides booked via apps will be Rs 45. The fares can also be linked to the inflation rate, allowing the transport department to revise them every year.

With legal hurdles yet to be cleared, auto drivers’ unions in Bengaluru launched their own app, Namma Yatri, on November 1. Developed by the central government’s Department for Promotion of Industry and Internal Trade, the app has been designed under the Open Network for Digital Commerce model. With a pick up fare of Rs 10 for every booking, the app charges Rs 30 for the first 2km and Rs 15 for every subsequent kilometre.

Rudramurthy, general secretary of Auto Rickshaw Driver’s Union, Bengaluru, said: “The intention behind designing the app is to provide livelihood for auto drivers along with passenger safety with fair pricing and without any middlemen. The earnings will go directly to the auto driver and he has the option to ask for more. Unlike ride hailing apps that have the sole intention of destroying the driver’s livelihood, this app is for the auto drivers and offers direct services to customers.”

Irshad Baig, an auto driver whose vehicle was seized by the transport department in October for accepting bookings through ride hailing apps, said, “I think both the aggregators and the government have taken us for granted. The policies framed by the government and the business models of tech giants have put our livelihoods at stake and have caused inconvenience to the public. My earnings from ride hailing apps have dropped to Rs 500-Rs 600 a day from Rs 900-Rs 1,000 a day two months ago. People prefer cabs or commute by public transport instead of booking auto rickshaws via apps.”

Varadaraj, another auto driver, said that he was not dependent on Ola or Uber for his livelihood. “I earn at least Rs 1,000 a day by operating on meters, which are more convenient.”

Dakshita Katta, a passenger, said, “Travelling on a three-wheeler is no longer cost-saving, especially after Ola and Uber hiked prices. I am left with no choice but to agree with the decision taken by the government to regulate the fares charged by ride hailing apps offering auto services.”

SN Siddaramappa, commissioner of the transport and road safety department, said: “Initially, ride hailing apps were welcomed by passengers as they offered doorstep pick up. The problem started when auto fares charged by these apps soared. As per the directions from the Karnataka High Court, we convened meetings and received suggestions from all stakeholders including the auto drivers’ unions, representatives of the ride hailing companies, the general public and mobility experts. We will file an affidavit and submit it in the Karnataka High Court.”

Siddaramappa added that the 5 percent service charge is based on Central Government’s Aggregator Rules 2021, which gives the state government the discretion to fix the charge up to a maximum of 20 percent. “However, the final verdict will be given by the high court,” he said.

First published on: 29-11-2022 at 19:53 IST
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