Actions on Discussions
State Governments Seek to Regulate Taxi Aggregators
Last week Karnataka became the first state to introduce state-prescribed fares for taxi aggregators. In addition to set fares, taxis will have to fix digital meters with printers and register themselves with local transport authorities. Maharashtra, with two of the largest taxi hailing markets – Mumbai and Pune – is set to follow this example. According to a source in the Maharashtra state government, their proposed rules go beyond the scope of Karnataka’s. These will include fare determination based on the cost of the vehicle and its engine capacity; regulation of taxi numbers through an induction schedule, which could adversely impact the employment of driver partners of taxi aggregators; and the ability to cancel licenses for non-compliance.
Different states have responded differently to the entry of transport aggregators. For instance, both Uber and Ola have capitalized on the Delhi government’s call for car sharing as the city struggles to combat its high pollution. Ride sharing services were introduced in Delhi in January with no government resistance, unlike in Karnataka.
This is why Uber and Ola have so far focused on undercutting each other’s pricing to build their respective customer bases. Strict regulation of taxi prices will hurt their business strategies, though benefiting customers in the long run. more