A committee constituted by the Ministry of Road Transport and Highways has recommended that dynamic pricing be permitted within a range, to match demand and supply of taxis.
A committee constituted by the Ministry of Road, Transport, and Highways, to review the issues relating to taxi permits has recommended that the taxi aggregators be allowed to indulge in surge pricing or dynamic pricing within a certain range, to match supply and demand.
If implemented, this would lay down a definite policy on surge pricing, and come as a huge relief for app-based taxi aggregators in the country that have faced resistance and even court cases and bans, from certain state governments, including the Delhi and Karnataka government over the issue.
Surge pricing lets a taxi aggregator like Ola or Uber charge a premium on the minimum rates during peak hours or at night time to match the demand and supply.
The Committee was constituted under the chairmanship of the Secretary (Road Transport and Highways) in May 2016. The members include, Joint Secretary (Transport), Ministry of Road, Transport and Highways; Transport Commissioners of the Government of NCT of Delhi, Government of Madhya Pradesh, Maharashtra, Telangana, and the Deputy Secretary (Transport), Member Secretary.
The report said, "The Committee supports dynamic pricing within a specified range to efficiently match supply and demand during peak hours as long as the consumers are appropriately protected."
The Committee, however, particularly recommended dynamic pricing for Deluxe Taxis, or taxis that are over four metres in length. The sub-four metre cabs could be categorised as Economy Taxis, it said.
"The Committee strongly recommends that the tariffs of Deluxe Taxis should not be regulated and be allowed to be determined by market dynamics," the report recommended.
The taxi aggregators may also be required to submit the minimum fare to the State Transport Department, which may fix a multiplier to cap the maximum fare.
Apart from this, the committee also recommended a simpler taxi permit and licencing regime, "to encourage new forms of urban mobility to create reliable alternatives to car ownership."
The committee also recommended that private vehicles, street taxis and All India Transport Permit taxis may be allowed to ply on taxi aggregator platforms and there should be no restrictions on the choice of the operator or aggregators with regard to composition of the fleet, i.e. deluxe and economy. The AITP taxis, however, cannot ply as street hailing taxis, the Committee said.
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