comscore Uber and Ola need to find the middle ground with surge pricing
News

Uber and Ola need to find the middle ground with surge pricing

Will banning surge price help commuters and taxi hailing services in Delhi, especially during the odd-even days?

Ola Cabs

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 guidelines

Also 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.

ALSO READ: Uber now makes it easy to find out how drivers rate you, here s how to find your rating in 4 clicks

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.

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.

For the latest tech news across the world, latest PC and Mobile games, tips & tricks, top-notch gadget reviews of most exciting releases follow BGR India’s Facebook, Twitter, subscribe our YouTube Channel. Also follow us on  Facebook Messenger for latest updates.
  • Published Date: April 19, 2016 4:51 PM IST
  • Updated Date: April 19, 2016 5:11 PM IST



new arrivals in india

Infinix Note 10 Pro
Infinix Note 10 Pro

16,999

Infinix Note 10
Infinix Note 10

10,999

Vivo Y73
Vivo Y73

20,990

OnePlus Nord CE 5G
OnePlus Nord CE 5G

22,999

iQOO Z3
iQOO Z3

19,990

Realme C25s
Realme C25s

9,999

Poco M3 Pro 5G
Poco M3 Pro 5G

13,999

Realme X7 Max 5G
Realme X7 Max 5G

26,999

Oppo F19
Oppo F19

18,990

Motorola Moto G40 Fusion
Motorola Moto G40 Fusion

13,999

POCO M2 Reloaded
POCO M2 Reloaded

9,499

OPPO A74 5G
OPPO A74 5G

17,990

Oppo A53s 5G
Oppo A53s 5G

14,990

Vivo V21 5G
Vivo V21 5G

29,990

Realme C25
Realme C25

9,499

Realme C21
Realme C21

7,999

Realme C20
Realme C20

6,799

Motorola Moto G60
Motorola Moto G60

17,999

iQOO 7
iQOO 7

31,990

Samsung Galaxy M42 5G
Samsung Galaxy M42 5G

21,999

Xiaomi Mi 11 Ultra
Xiaomi Mi 11 Ultra

69,999

Xiaomi Mi 11X Pro 5G
Xiaomi Mi 11X Pro 5G

39,999

Xiaomi Mi 11X
Xiaomi Mi 11X

29,999

Realme 8 5G
Realme 8 5G

13,999

Samsung Galaxy F02s
Samsung Galaxy F02s

8,999

Samsung Galaxy F12
Samsung Galaxy F12

10,999

POCO X3 Pro
POCO X3 Pro

18,999

Realme 8 Pro
Realme 8 Pro

17,999

Realme 8
Realme 8

14,999

Vivo X60 Pro Plus
Vivo X60 Pro Plus

69,990

Vivo X60 Pro
Vivo X60 Pro

49,990

Vivo X60
Vivo X60

37,990

OnePlus 9 Pro 5G
OnePlus 9 Pro 5G

64,999

OnePlus 9R 5G
OnePlus 9R 5G

39,999

OnePlus 9 5G
OnePlus 9 5G

49,999

Samsung Galaxy A72
Samsung Galaxy A72

34,999

Samsung Galaxy A52
Samsung Galaxy A52

26,499

Micromax In 1
Micromax In 1

10,499

Asus ROG Phone 5
Asus ROG Phone 5

49,999

Samsung Galaxy M12
Samsung Galaxy M12

10,999

Motorola Moto G30
Motorola Moto G30

10,999

Motorola Moto G10 Power
Motorola Moto G10 Power

9,999

Oppo F19 Pro Plus 5G
Oppo F19 Pro Plus 5G

25,990

Oppo F19 Pro
Oppo F19 Pro

21,490

Xiaomi Redmi Note 10 Pro Max
Xiaomi Redmi Note 10 Pro Max

18,999

Xiaomi Redmi Note 10 Pro
Xiaomi Redmi Note 10 Pro

15,999

Xiaomi Redmi Note 10
Xiaomi Redmi Note 10

11,999

Realme Narzo 30A
Realme Narzo 30A

8,999

Realme Narzo 30 Pro
Realme Narzo 30 Pro

16,999

Infinix Smart 5
Infinix Smart 5

7,199

Samsung Galaxy F62
Samsung Galaxy F62

23,999

Samsung Galaxy A12
Samsung Galaxy A12

12,999

Nokia 5.4
Nokia 5.4

13,999

Nokia 3.4
Nokia 3.4

11,999

Realme X7 Pro 5G
Realme X7 Pro 5G

29,999

Realme X7
Realme X7

19,999

Vivo Y31
Vivo Y31

16,490

Oppo Reno5 Pro 5G
Oppo Reno5 Pro 5G

35,990

Samsung Galaxy S21 Ultra 5G
Samsung Galaxy S21 Ultra 5G

1,05,999

Samsung Galaxy S21 Plus 5G
Samsung Galaxy S21 Plus 5G

81,999

Samsung Galaxy S21 5G
Samsung Galaxy S21 5G

69,999

Vivo Y12s
Vivo Y12s

9,990

Vivo Y51A
Vivo Y51A

17,990

Samsung Galaxy M02s
Samsung Galaxy M02s

8,999

Xiaomi Mi 10i
Xiaomi Mi 10i

21,999

Oppo A15s
Oppo A15s

11,490

Tecno Spark 6 Go
Tecno Spark 6 Go

8,499

Vivo V20 2021
Vivo V20 2021

24,990

Vivo Y20A
Vivo Y20A

11,490

Xiaomi Redmi 9 Power
Xiaomi Redmi 9 Power

11,999

Motorola Moto G9 Power
Motorola Moto G9 Power

11,999

Motorola Moto G 5G
Motorola Moto G 5G

20,999

Vivo V20 Pro
Vivo V20 Pro

29,990

Xiaomi Mi 10T
Xiaomi Mi 10T

35,999

Xiaomi Redmi 9i
Xiaomi Redmi 9i

8,299

Xiaomi Mi 10T Pro
Xiaomi Mi 10T Pro

39,999

Infinix Hot 10
Infinix Hot 10

9,999

Vivo V20 SE
Vivo V20 SE

20,990

Vivo V20
Vivo V20

24,990

Micromax In 1b
Micromax In 1b

6,999

Micromax In Note 1
Micromax In Note 1

10,999

OnePlus 8T
OnePlus 8T

42,999

Samsung Galaxy F41
Samsung Galaxy F41

15,499

Apple iPhone 12 Pro Max
Apple iPhone 12 Pro Max

1,29,900

Apple iPhone 12 Pro
Apple iPhone 12 Pro

1,19,900

Apple iPhone 12 Mini
Apple iPhone 12 Mini

69,900

Apple iPhone 12
Apple iPhone 12

79,900

Poco X3
Poco X3

16,999

Realme Narzo 20A
Realme Narzo 20A

8,499

Realme Narzo 20
Realme Narzo 20

10,499

Realme Narzo 20 Pro
Realme Narzo 20 Pro

13,999

Oppo F17
Oppo F17

16,990

Samsung Galaxy M51
Samsung Galaxy M51

22,999

Poco M2
Poco M2

10,999

Oppo F17 Pro
Oppo F17 Pro

22,990

Realme 7 Pro
Realme 7 Pro

19,999

Realme 7
Realme 7

14,999

Best Sellers