Aggregators v Government: Transport department to consult CM on convenience fee before finalising stand in HC case

“The CM has asked me to resolve the issue keeping public interest in mind. We will not allow citizens who book their auto rides on apps to be hurt by steep charges,” Sriramulu told ET on Tuesday.

The transport department intervened only after the authorities got complaints that aggregators were collecting a high service charge, he said.

The court is hearing writ petitions from the app-based aggregators who challenged an October 6 order from the
transport department asking them to shut their auto ride operations in Bengaluru. The order was issued after the media reported that ride hailing apps were charging minimum fares up to Rs 100, while the state had capped the base fare at Rs 30.

The aggregators are operating auto rides through their platforms on the strength of an interim order dated October 14, capping the convenience fee at 10%, exclusive of goods and services tax (GST).

On Saturday, a team of senior transport department officials, led by transport secretary NV Prasad,
held detailed talks with the representatives of Uber and Ola to reach an understanding on the size of convenience fee chargeable on customers. The aggregators wanted a convenience fee of 20% on auto fares exclusive of GST, said officials privy to the proceedings.

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Transport officials, however, indicated at the meeting that the department was comfortable with the 10% fee cap fixed by Justice MG Shukure Kamal as an interim arrangement on October 14, and said they would favour its continuation as the existing arrangement was working smoothly. The aggregators also sought a flexi-fare – or surge pricing – but the government is not in its favour.

The transport department is now required to file an affidavit before the high court on the outcome of its meeting with the app-based ride-hailing services. Since Uber is a foreign direct investor, the transport department has escalated the subject to the CM’s office and will finalise the affidavit draft only after briefing the chief minister and taking his views.

“Though the subject falls in the regulatory domain, we will go ahead only after hearing from the Transport Minister and the Chief Minister as it concerns a large number of citizens,” said a senior official, who did not wish to be identified.