The Karnataka High Court dismissed the petitions filed by ride-hailing giants Ola and Uber, challenging the government’s imposition of a 5% cap on service charges. The court upheld the regulatory decision, emphasizing the need for consumer protection and fair pricing in the ride-sharing industry. Ola and Uber argued that the cap would hinder their operational efficiency and profitability, but the court found these claims insufficient to overturn the regulation.
Bengaluru: The Karnataka High Court dismissed petitions filed by popular ride-hailing services Ola and Uber. The petitions challenged the Karnataka Transport Department’s notification to cap the service charge at 5 percent for app-based autorickshaws.
This decision is expected to provide significant relief to commuters in Bengaluru, who have been vocal about the need for reasonable fare limits.
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The bench, led by Justice Suraj Govindaraj, ruled that aggregators can levy service charges up to 5 percent in addition to the fixed fare, maintaining the cap set by the November 2022 government notification. The court’s full order expected to be released soon.
The petitions from Ola and Uber arose after the Karnataka Transport Department introduced a fare structure in response to public dissatisfaction. In October 2022, the minimum fare for autorickshaws via app-based platforms steeply hiked to Rs 100 from the earlier Rs 33. This led to widespread protests from consumers, prompting the government’s intervention to cap service charges and base fares.
Overall, this ruling seen as a significant victory for commuters in Bengaluru, who have been advocating for more affordable and transparent pricing for app-based autorickshaw services.
During the legal proceedings, the ride-hailing companies Uber India Systems Pvt Ltd and ANI Technologies Pvt Ltd (which operates Ola) challenged the state government‘s regulations capping the service charges on their platforms.
They argued that these caps contravened existing laws and requested the court to mandate the government to establish fares for autorickshaws on their aggregator platforms in Karnataka. The companies advocated for a commission or service fee of up to 20 percent and a surge price of up to twice the base fare, citing the Motor Vehicles Aggregator Guidelines-2020 issued by the central government.
However, the state government defended its regulatory notification, arguing that the services offered by these ride-hailing platforms akin to contract carriages and thus fell under the state’s regulatory domain, in the interest of public welfare.
Ultimately, the court sided with the state government and dismissed the petitions filed by the ride-hailing companies.