Micro edit: Commuters caught in govt, app-based cabs' crosshairs

The state government's plan to bring the aggregator cab trade under the wings of the state transport department and the Regional Transport Offices could be a mixed bag for commuters. Aggregator cabs have managed to use market dynamics to reduce prices over the 15 kilometre-plus long routes when compared to black-and-yellow taxis.

By giving a business model to its driver-partners in which the company itself takes a small cut and leaves the lion's share of the fare to the driver, these firms have instilled business instincts, and a competitive spirit in its drivers. Unlike normal taxi drivers who retire for the day when they have made enough money, aggregator cab drivers seek to maximise rides.

The state recently allowed normal taxis to provide air-conditioned rides to customers at a premium of 20 per cent on the normal meter fare. This premium means the move might not dent the prospects of aggregator cabs much, since the latter tend to have rates that lower over long-distances than the normal meter fare.

There is the fear that government control could stifle the market forces that allow aggregator cabs to give commuters cheaper rides. It is this tightrope that the government will have to walk. While a cap on surge pricing is welcome, too many controls could make aggregator cabs just like normal taxis. For Mumbai, known as a city that never sleeps, it could be a case of going back to square one in a trade notorious for refusing passengers, and where the driver is king rather than the commuter.