Transport dept proposes to cap surge pricing for app-based cab services at 1.5 times of base fare

According to Bhimanwar, the Central government has stipulated that surge pricing can only be raised by up to 1.5 times, but the state has not yet enforced this regulation. Under the new proposed policy, however, this cap will be implemented in Maharashtra to prevent excessive fare hikes. “For example, if a commuter books a cab from the airport during the night, they often find that the fare can be as much as three to four times higher than normal,” Bhimanwar noted. “Our policy will regulate these surge prices while still allowing for night charges. However, those charges will be capped to ensure fairness.”

Meanwhile, the transport department is also wanting to allow bike taxi service. The bike taxi and cab-based service under one policy framework.

Beyond surge pricing, the new regulations also address the issue of cancellation of short-distance bookings, which causes inconvenience to passengers. The proposed policy seeks to prevent this by prohibiting cancellations for short-distance trips and essential service bookings, such as rides to hospitals, airports, and educational institutions. The transport department’s proposal comes at a time when the app-based business has evolved significantly since its inception in 2014. Bhimanwar acknowledged that although the Central government had initially introduced guidelines for the industry, a decade of experience had revealed several challenges for all stakeholders, including aggregators.

A public interest litigation was filed in the Bombay High Court, wherein the court questioned the transport department how without license the aggregator operations are allowed. This matter was eventually taken up by the Supreme Court, which ordered the formation of a committee to draft a regulatory framework. The committee, led by retired officer Sunil Shrivastava, held extensive consultations with various stakeholders—ranging from aggregator companies to consumer advocacy groups—and has submitted a comprehensive report. “The recommendations from this committee are aimed at providing a structured approach to resolving the issues faced by aggregators, drivers, and passengers,” Bhimanwar said. “We expect the policy to be discussed and approved by the state cabinet soon.” As the state moves towards implementing these new regulations, commuters and drivers alike are hopeful that these changes will lead to a more predictable, fair, and efficient app-based experience across Maharashtra.

The said policy is with the state government from over a year now and the transport department is hopeful to get it approved following its 100-day programme that it recently announced after a presentation made to Chief Minister Devendra Fadnavis.