Uber and Ola seem to be the cynosure of Karnataka Transport department eyes. The Transport Department has cracked a whip on surge pricing by taxi-hailing services Uber and Ola.
In Surge pricing fare rates automatically increase, when the taxi demand is higher than drivers around you. However, according to state department policy, fares and other charges cannot be higher than the fare fixed by the government and the apps can only charge within a band the upper limit of which is capped.
“We have not allowed the surge pricing because the purpose of using the technology is to increase service standards for cab users at competitive fares. We have focused this policy around this, and given a lot of importance to safety aspects,” Ramalinga Reddy, Transport minister, told ET.
The Kolaveri is in making more money when there is more demand.
Uber claims that prices are surging to ensure reliability and availability for those who agree to pay a bit more and it also encourages more drivers to get back on the road and be able to earn more money. Usually, the Uber surging only last for a few minutes depends on the demand and the amount of available drivers in your area.
Uber faces a lawsuit in US in relation to the same. The lawsuit alleges that Uber’s CEO, Travis Kalanick conspired to increase prices on days with high volume Uber use, such as New Year’s Eve. And, a federal judge on Thursday had denied a motion to dismiss the class action lawsuit against Travis Kalanick.