Ola, Uber, Rapido autos can levy 10% extra charge plus GST: Karnataka HC

App-based transport aggregators like Ola, Uber and Rapido got a reprieve from the Karnataka high court, when it lifted the ban imposed on them by the state transport department. Noting that the aggregators should follow the fares fixed by the government, the court allowed them to levy 10 per cent additional charge over and above the base fares for the autorickshaw services offered through their platforms.

This will however be a temporary measure till the government fixes fares as per the law.

On October 13, the high court issued an interim order, after the fresh round of talks between the aggregators and the government fell through as both parties had failed to arrive at a consensus on contentious issues.

Ola, Uber and Rapido had moved the court challenging an order issued by the Karnataka transport department effectively banning their auto-rickshaw rides. The government had made such services illegal after multiple complaints of overcharging.

The transport department pointed out that there is no scope for the mobility players to offer autorickshaw services on their platform under the Karnataka On-Demand Transportation Technology Aggregators Rule (KOTTAR), 2016. They were asked to give a fresh application to resume autorickshaw services. According to the rules, the aggregators are given licences to provide taxi services only, a motor cab having a seating capacity not exceeding six passengers, excluding the driver.

Also read: Ola, Uber continue to operate autos in Karnataka despite ban, warning

However, the high court said that ban is not required on these services and the rules in the Motor Vehicles Aggregator Guidelines (MVAG) 2020 issued by the Central government, include the definition of auto-rickshaw services. The state government has now sought 10-15 days from the court for fixing the rates for autorickshaw services offered by the aggregators based on the MVAG 2020.

The court has also ordered that the state officials must not take any coercive action against the auto aggregators until it submits a report. Further, the state said that in the interim, while the transport department comes back with the fare pricing mechanism, the companies can charge 10 per cent of the base fare. The hearing related to this case has been postponed to November 7, 2022.

Also read: High surge price: Ola, Uber asked to stop running autos in Bengaluru

An Uber spokesperson welcoming the court order said the order recognises that auto drivers have the right to operate using aggregator platforms. “It also recognises that platforms like Uber can charge a booking fee, which allows them to cover their costs and continue to provide their services,” said the spokesperson, according to media reports.

Also, the spokesperson said that e-hailing autos were thriving in Bengaluru because of the value it brings to drivers and riders, who prefer it because of the upfront pricing, the lack of haggling and the safety features that come with the app, he added. However auto aggregators are not keen on commission caps, it seems.

Earlier, the autos were charging a flat rate of ₹40 per ride as convenience fee. According to the Uber spokesperson commission caps threaten the viability of this vibrant e-hailing sector, which will impact tens of thousands of auto drivers who rely on it for their livelihoods and will result in the shrinking of this fledgling category.