Centre Will Allow Three Times Increase In The Surge Pricing During High-Demand

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Surge Pricing is a major issue for the commuters relying on cab services like Uber and Ola. The Centre has shown green light for cab aggregators to charge customers up to three times the base fare during periods of high demand.

A new set of rules has been drafted for the industry since ride-hailing apps like Uber and Ola have long argued in favor of surge pricing to regulated the demand and supply of cabs on their platforms.

In addition to price hike which will soon be regulated there are other guidelines that could be in line with those proposed in December 2016, the official told ET.

“Surge pricing is intrinsic to the demand and supply situation,” the official said. “Like with the December 2016 guidelines, our policy will mention surge pricing and what should be the kind of capping, among other things.”

The rules that have been proposed follows the new motor vehicle law. This law recognized the cab aggregators for the first time as digital intermediaries or marketplaces where earlier the rules did not recognize cab aggregators as separate entities, causing firms such as Uber and Ola to operate in a grey zone.

The rules will be applied to people all across the country. “But they’ll have to come up with reasoning in case of local variations, which is fine,” the official added.

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