New rules for commissions on ride-hailing services surged prices for Ola and Uber in India

Uber and Ola Cabs

Government of India has published a new set of rules on Friday for ride-hailing services restricting them to draw up to 20% of fee on ride fares in the country putting a hold to big firms like Ola and Uber that are already struggling due to the COVID-19 Pandemic.

The new guidelines have put the app-based ride-hailing services under the regulatory framework in the country and have also put a cap on the fare service strategy in which the fare of the services jumps during the hours of peak demands that restricts the companies to charge a maximum of 1.5 times of the base fare in the peak demand hours.

Also, the companies can choose to offer their services at 50% of their base fare as well.

The new rules also notes that the drivers will not be permitted to work for more than 12 hours in a day, and that the companies need to provide them insurance cover. It also notes that under no circumstances the cancellation fee imposed on the rider or driver can not be more than 10% of the total fare and the fee can not exceed more than INR 100 or $1.35.

The new rules notes that female passengers looking for pooled service will have the option to share the cab with only female passengers. Also, all cab aggregators are required to establish a control room with round-the-clock operations.

Big ride-hailing service Uber and Ola have not publicly shared accurately how much they charge their drivers for each ride, but as per the standard industry estimates shows that a driver partner with either of these firms makes up to 74% of the ride fare after paying taxes and as per the new guidelines a driver should get at least 80% of the ride fare.

New rules by the government are expected to hit on the operating costs of the app-based ride-hailing services in India, that have already cut a large number of jobs in the country to trim operating costs.


Source: Techcrunch

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