The Delhi government s controversial odd-even scheme may be a noble concept but it has certainly not been without huge inconvenience to daily commuters. In the absence of quality public transport and in such scorching heat, people are heavily reliant upon the taxing hailing services such as Ola and Uber. Also Read - Uber cab service resumed in 31 cities in India with new Lockdown 4.0 guidelinesAlso Read - Uber launches 'Uber Connect' package delivery service to rival Dunzo and Swiggy Genie
Sadly, the ever-increasing surge price just added to woes of commuters who took to the social networking sites to express their displeasure. It is worth pointing out that the first day of the odd-even was on April 15, which was holiday in most of the offices. But on the Monday, which was the first full-fledged working day, taxi hailing services surge price went up to three times the usual rate and to five times during morning rush hour. Also, the two services grappled with scarcity of cabs. Also Read - Uber to operate 'Essential' cab service to hospitals and pharmacy stores in 4 cities
After severe criticism from users and strict warning by the Delhi government, taxi hailing services Uber and then Ola Cabs finally succumbed to the pressure and announced temporarily suspending surge price.
Given the threat of the Delhi government to cancel permits and impound vehicles of our driver partners, we are temporarily suspending surge in Delhi with immediate effect. We hope to work with the government to keep Delhi moving especially during this time when the citizens need us the most, said Gagan Bhatia, General Manager, Uber North.
To make the government’s Odd Even initiative a success, Ola has temporarily pulled out Peak Pricing in Delhi NCR, said Deep Singh, Business Head North of Ola Cabs.
Surge vanished, but so did the cabs
Banning the surge price may have given bit of respite but it hasn t completely solved the problem as the two taxing hailing services faced severe crisis of cabs. Clearly, the two services weren t prepared for a ban on surge price and for the massive demand during the odd-even days.
The interesting thing here is that cabs disappeared shortly after the two services announced suspending the surge price. This could be the immediate impact on users wherein drivers are reluctant to accept bookings when they don t have the opportunity to make more money. On Tuesday, things look relatively better in terms of cab availability though. Uber in its statement had also pointed out this problem.
Not surging is saying citizens shouldn’t have the option. Not surging is saying we should be just like a taxi and be unreliable when people need us most. These are outcomes that take choices away from the consumer and make it harder to get around cities – these are outcomes that we put a lot of hard work in to avoid so that at least you have the choice if you want one, it said.
Surge: Just an Indian problem?
Surge isn t just under scanner in India. In fact, Uber s pricing strategy has drawn flak in the US and other countries as well. According to a CNET report, most of Uber riders in the West despise the surge price. And not to forget, Uber was heavily slammed during emergencies like Hurricane Sandy and the Sydney hostage situation.
According to a recent report, US San Francisco Better Business Bureau gave Uber an F grade due to huge number of complaints about its surge pricing. Another report said New York lawmakers have even suggested bringing a law to cap on how high fares can shoot up.
After having defended the surge pricing for a very long time, Uber has started to come to terms with local authorities and in cases like emergencies it has voluntarily halted the surge price. A recent example is the US Northeast blizzard earlier this year when Uber announced its prices will not exceed 2.8x its usual fares.
India s taxi industry is estimated to be worth $9 billion and has huge possibilities of further growth. Ola and Uber are already aggressively making efforts to tap this growth. Uber has plans to invest $500 million in India apart from the $1 billion already committed earlier whereas Ola is expanding its fleet in Delhi. While these services work on building infrastructure in the country, they have to come to terms with local guidelines and directives.
Binoy Prabhakar (@binawy) April 18, 2016
SHERLOCKED (@Legen_dary___) April 18, 2016
Should surge pricing completely go away? What s the solution?
I believe it is bit wrong to vilify surge pricing, but I am not in favor of allowing massive and uncontrolled hike in prices, especially during peak hours. Considering that surge price, in case of Uber, majority of benefits goes to drivers, which further encourages them to do extra trips. But it does not mean that there should not be ceiling. Uncapped surge is just like taking advantage of your emergency and making money out of it.
So, what could be the solution. According to the Delhi government approved fares, economy radio taxis can charge Rs 12.50 per km whereas non-AC and AC kaali peeli taxi charges are Rs 14 and Rs 16 per km for respectively. Moreover, cabs with radio taxi label can charge up to Rs 23 per km. In case of Ola and Uber, the base price starts at Rs 6 per km but goes up to Rs 40 or more in case of high demand (read surge pricing). The government should not completely ban the surge price but ensure the surge isn t more than Rs 23 per km as per its guidelines.
Also, it is worth pointing out here that Director General Investigations of the Competition Commission of India has just cleared Ola Cabs in a case where it was accused of anti-competitive practices. Also, Uber was cleared in another similar case filed by rival Meru Cabs which accused the former of anticompetitive practices in Delhi.
The solution is something similar to the MRP, where retailers aren t allowed to sell more than the price mentioned on the item. A similar mechanism could be brought in for the surge price as well. The taxi hailing services should be allowed surge but then it should not exceed to a certain amount, which the government deems fit. Complete ban would discourage drivers to be part of Ola Cabs and Uber or any other app-based taxi hailing services, which are much easier to use for end users than the traditional taxi services.
I have been in Delhi for around 10 years and am no stranger to the agony of begging autowallas and taxiwallas to go by meter or take an equivalent amount. Situation gets worse when you try to take an auto or taxi from Noida (Uttar Pradesh) to any part of Delhi as there are still very less number of autos with Delhi-NCR permit. Go to New Delhi Railway Station and try getting an auto or taxi that goes via meter. At least in case of taxi hailing services, there s no pain of bargaining with the drivers. From locating the driver to payment, the app-based services provide huge comfort.
The government should have resolved this problem long time ago before it became a huge mess and caused problems to commuters. But I think it s high time it is fixed and encourages more technology based services for end users.