State Transport dept to put cap on surge fare of app-based cab services

Kolkata: Following a series of complaints from commuters, the state Transport department will soon put a cap on the surge fare in the app-based cab services provided by aggregators like Ola and Uber.

The state Transport department has written a letter to these two aggregators urging them to submit a report of their policy regarding fixation of surge prices. They have been also instructed to have a basic minimum fare similar to that of yellow cabs and put them in the public domain.

"There has been a lot of complaints about high charging particularly during natural calamities when distressed commuters need maximum humanitarian support. We have sought a reply on what prompts them to charge in an arbitrary manner and have made it clear to them that such actions will not be entertained. They have been directed to submit a report in this regard in a fortnight," a senior official of the Transport department said.

The department has also instructed the aggregators to have a system in place so that a passenger does not need to dole out more than the agreed fare that is displayed to him/her at the time of boarding a cab.

It may be mentioned that random checks by the Transport department in different areas at different times, particularly during rain and storms, have shown sky-high rates. "Surge price can't be elastic beyond the limit. There are chances of manipulating the situation by going off the system collectively to create a massive demand-supply gap and engineer a surge pricing. This is not desirable," the official maintained.

"Surge pricing is not always transparent and difficult to explain. Having a maximum cap on surge pricing to the extent of 2.5-3 times may be logical as it will help protect the interest of both the operator and the consumer. It is not very difficult to implement as their technology is great," the senior official pointed out.

Earlier in a meeting with the department, the aggregators had claimed that the surge price is calculated by an algorithm when there is a demand-supply mismatch. If the demand is more than the supply, the fare rises. "However, we have found that there is a mismatch between their claims and the real situation," the official said.