Taxi policy guidelines: Cab surge pricing could be capped at thrice the base fare

NEW DELHI: The government is likely to cap surge pricing by cab aggregators such as Ola and Uber at three times the base fare – with riders – and retain their commission at about 20%.

Surge pricing will likely be restricted to certain times of the day and the total number of hours or rides when it is applicable may be limited, a government official aware of the development told ET.

“On the issue of surge pricing, it is likely to be capped at thrice the base price but it has to be decided at what hours of the day it will apply,” the official said.

The new rules are based on the taxi policy guidelines prepared by a committee that were accepted and issued by the ministry of road transport and highways in 2016. The panel had recommended that range-bound dynamic pricing be allowed to effectively match demand and supply.

“It is felt that the maximum tariff may be permitted up to three times the minimum tariff. To increase the availability of taxis during the night time, the committee recommends that maximum tariff may be allowed up to four times that of minimum tariff from midnight to 5 am,” the committee had said.

The government may let aggregators retain their share of commission at 20%, while drivers get the remaining 80% of the fare.

“States may then levy some charge on the aggregator’s commission if they want to,” the official said.

The guidelines may require aggregators to set up a dispute redressal mechanism in the form of a helpline number for consumers to register complaints. Cab aggregators in India have so far been largely unregulated and the revised guidelines will help set some benchmarks for their operations.

“We also have criteria related to cleanliness and maintenance of the cars being used by aggregators,” the official said.

The committee formed to review these guidelines has finished deliberations and the policy is awaiting final approval, a second official said.

The government has proposed that drivers should be charged if they cancel a ride without any reason.

Currently, the burden of ride cancellation generally falls on the consumer. “We have introduced periodic selfie-verification through the day to ensure that the authorised driver is driving the cab,” the official said.



The Motor Vehicles (Amendment) Act, 2019, defined aggregators as digital intermediaries that can be used by passengers to connect with adriver for transportation.

Surge pricing, when fares are increased due to higher demand, has been one of the biggest pain points for cab aggregator customers, with no transparent system in place.