Karnataka government to finalise convenience fee for app-based auto rides soon

Karnataka’s transport department must file an affidavit before the high court on Friday on how much companies such as Uber and Ola can collect from users who book auto rides on their apps.

The court is hearing writ petitions filed by Uber and Ola, challenging an October 6 order by the transport department, which asked them to stop offering auto rides in Bengaluru. The order followed media reports saying the aggregators were charging minimum fares of up to Rs 100, while the state had capped the base fare at Rs 30.

The aggregators, however, have been accepting bookings for auto rides on the strength of an interim order issued by the high court on October 14, which capped the convenience fee at 10%, exclusive of GST. The case will come up for hearing before Justice CM Poonacha on Monday.
State transport minister B Sreeramulu has already held discussions on the subject with transport secretary NV Prasad, transport commissioner SN Siddaramappa and other senior transport officials. The senior officials are expected to brief chief minister Basavaraj Bommai either on Thursday or Friday before finalising the state’s stand before the court.

The chief minister’s views will be crucial as hundreds of thousands of auto rides are booked on these platforms every day, and any decision will impact large numbers of Bengalureans.

Discover the stories of your interest

Last month, at a meeting organised by senior transport authorities, the aggregators reportedly sought a convenience fee of 20% on auto fares, exclusive of GST.

The officials, however, are said to be more inclined towards the interim fee fixed by Justice MG Shukure Kamal on October 14 as they believe it takes care of both consumer interest and business viability. The chief minister, however, will have the final word.

The aggregators have also sought flexi-fares – surge pricing, in other words – but the government is not in favour of this.

In a chat with ET early this month, Sreeramulu had said the government would not allow aggregators to impose steep charges on citizens for auto rides.

Uber and Ola did not immediately respond to emailed queries by ET on Wednesday.

Uber said in a statement on November 1, “Currently, our commission in Bengaluru is capped at 10% of the fare collected. This is not financially sustainable. If our costs cannot be covered through commissions, we will have to find ways to offload costs that could impact the experience of drivers and riders. In the face of these commission caps, we may have to make the difficult decision to limit Uber Auto to select parts of Bengaluru where the service is viable.”