Do Ola & Uber Charge Regular Customers More Than First-Timers?

This is not the first time that cab aggregators—especially Ola and Uber—the country’s two largest cab aggregators have been under the government’s radar regarding non-compliance with the rules.
Ola Cabs.
Ola Cabs.

On Monday, taking cognizance of the customer complaints against Ola and Uber, the consumer protection regulator CCPA summoned a meeting with cab aggregators—Ola, Uber, Meru Cabs, and Jugnoo, asking them to come clean on the fares charged by them for first-time and regular customers as well as the algorithm used to calculate the fares.

Rohit Singh, the Union consumer affairs secretary, in a letter to cab aggregators, alleged that the fares charged by them are higher for customers traveling regularly via cabs compared to the first-time users. Meanwhile, Central Consumer Protection Authority (CCPA) Chief Commissioner Nidhi Khare said that the regulator wants to understand the algorithms which are used to charge the customers as well as other policies adopted by cab aggregators for operations in the country. The meeting is likely to take place on May 10. 

This is not the first time that cab aggregators—especially Ola and Uber—the country’s two largest cab aggregators have been under the government’s radar regarding non-compliance with the rules.

Complaints Against Cab Aggregators

In the past, several disgruntled customers have taken to social media platforms such as Facebook, Twitter, and Instagram, mostly against Ola and Uber. Most of these complaints follow a sordid pattern of concerns regarding customers’ safety, frequent ride cancellations by drivers, misbehavior by drivers especially towards female customers, higher fare prices, unresponsive redressal mechanism via apps, and refusal to provide the inbuilt air conditioning service amidst the scorching summer heat. 

In April, Clootrack along with media outlet Inc42 analyzed 21,573 reviews on Google Play Store and Apple Store for apps of Ola and Uber. Of this, 97 per cent of customers pointed ride cancellation to be a major issue, whereas poor redressal mechanism or poor mobile app experience is the second concern amongst customers.

In another survey by Local Circles, which analyzed 65,000 customers, 71 per cent pointed to frequent cancellation by cab riders to be a persistent issue, whereas 45 per cent of participants pointed out that surging fares are a big negative for them while taking the cab services. The customer woes especially become more evident in cities where other transport infrastructures such as in-built metro are not well-equipped, and where customers solely rely on taxi services for commuting. 

Higher Fare Price Amid Soaring Fuel Prices

Several drivers earlier told Outlook Business that soaring fuel prices are a major reason for their refusal to switch on the in-built ACs, as they cannot afford such service. Others pointed to the broken business model between the drivers and cab aggregators to be a reason for their refusal to provide such services or adhere to the guidelines set up by the government. The cab drivers also said that the two waves of the Covid-19 pandemic—which stalled the cab business— have burdened the aggregators and drivers, and hence they are demanding higher fare prices.  

Shaikh Salauddin, founder and state president of the Telangana Gig and Platform Workers Union (TGPWU) had said in a press release, “Currently, the fare is less than Rs 12 to Rs 13 per km and the drivers want at least Rs 24 to Rs 25 per km to turn on the AC. We also understand the problems the customer faces in this hot weather when ACs are turned off. The government and the collector must sit together and resolve this issue.” 

However, cab aggregator Uber told Outlook Business, “Uber does not levy extra charges for switching on the AC during a ride, and any driver who is charging such a fee will face action from the company for violating our community guidelines. Uber expects drivers on its platform to keep the car AC switched on during a ride. In case of the driver’s refusal, riders have the option to reach Uber via in-app chat messages and post-trip feedback. Continued non-compliance by drivers may lead to them losing access to the Uber app.”

Existing Guidelines For Cab Aggregators 

According to the Motor Vehicle Aggregator Guidelines, 2020, as the city taxi fare is indexed by the WPI, the trip charges have been capped at 1.5 times the base fare, whereas the minimum chargeable price has been capped at 50 per cent of the base fare. In states where the cab prices have not been determined, Rs 25/Rs 30 will be the base fare. Most states are yet to determine the cab fares. The base fare chargeable to any customer will be for a minimum of 3 km. This is done to compensate the amount for mileage, distance traveled and fuel utilized while picking up the customer from the pick-up location. 

Moreover, the share for aggregator has been capped at 20 per cent, and that of the driver has been capped at 80 per cent. Moreover, in case of cancellation of ride by either the cab driver or rider without any valid reason, a penalty of 10 per cent has been imposed for the total fare not exceeding Rs 100. 

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