Karnataka Government has repeatedly taken wrong decisions related to the Uber/Ola service. In 2014, I had written about this in the following article.
Government Fails to understand Uber Business Model
Time has come again to point out once again that Karnataka Government is taking another bad decision in trying to declare Uber-Ola aggregation service illegal.
We the senior citizens of Bangalore are aware of how the Autos in Bangalore have operated from times immemorial with hard bargaining. No auto trip ever ended without a serious argument at the end of the journey with the driver demanding more and we refusing to pay more than the meter. Those were the days when Taxis were never in contention for the middle class.
The advent of Uber/Ola as app aggregators brought relief to this BP raising arguments with the auto drivers and many switched to travelling by taxis which were cheaper than the “Pay Double” demand of the auto drivers.
Karnataka Government then interfered and declared Uber/Ola as “Taxi Operators” and made the technology service more complicated and expensive. The JDS as a political party also contributed to this move besides the greed for more tax collection.
In the recent days, the “Surge Pricing” by Uber/Ola had made the taxi service once again unaffordable. Our trips from South Bangalore to Airport which used to cost Rs 700/- now have reached Rs 1200/-. The discredit for this inflation has to go to the ill-advised move of the Government.
Now as people started to switch from Uber cars to Uber autos as an alternative to non availability and higher cost of cars, the Government has again poked its nose to ban Uber/Ola autos.
The ostensible reason is that there are complaints about a minimum charge of Rs 100/- as against Rs 30/- fixed by the Government. The solution to this is not banning the Uber/Ola autos but to understand and rectify the issue.
For Consumers if they want to travel a short distance, they need to stand by the road and run behind autos …and beg them to come to their destination. Even if they agree no auto comes for a short distance on meter. Will the Karnataka Government control this?
On the other hand what happened in the aggregation was depending on the destination, the willing auto would respond and come to the door step. This avoided the need to wait at road ends, send an errand boy to fetch the auto to the door step and the endless argument on how much above the meter one has to pay.
Many times the lack of argument itself is a premium for the service.
The Uber/Ola is an add on service which is optional. A consumer still has the right to stand at the street corner, locate an auto for short distance at a minimum rate of R 30/-.
If he choses the Uber/Ola, he is exercising his choice for a higher grade of service and transparently making a payment.
What needs to be regulated is that Uber/Ola does not appropriate the premium entirely and ensure that the auto driver is equally benefitted.
If more consumers chose the app aggregator, more autos opt for registration, and many respectable persons who run autos can operate independently out of the control of the Autoriksha associations which have the potential to become political groups as we have seen in Chennai.
Think of a house which is 100 meters from the main road and old people or people with luggage to catch autos. Will they prefer bargaining for Rs 30/- or be prepared to pay Rs 100?
Technically also, we should reverse the Government decision to consider App aggregators as Taxi Service and consider them only a “Technology Service”. Treat them fairly , let them make money out of their service, let them not exploit the drivers and leave the discretion to use or not use the service to the consumers.
I wish the Government order is either withdrawn or a stay is brought on its operation.
We can discuss the regulation where by the practice of the aggregator charging 30% or more of the trip money is reduced to a maximum of 15%. This will increase the revenue of the taxi and auto operators. In the initial days, the charges for Autos was actual meter charges plus Rs 10/- as service fee. If Rs 10/- is too low, it can be raised to Rs 20/-.
If surge pricing is allowed, 75% of the surge should be payable to the driver.
Over and above these regulations, it can be also mandated that charge beyond a limit should be credited as “Cash back coupons” that can be encashed like loyalty coupons within the next 3 months. Some of these may lapse but otherwise it may guarantee further business to the aggregator and hence the scheme should be acceptable.
At present therefore, I urge the Karnataka Government to withdraw the order on banning Uber/Ola auto, which is anti-consumer and will not be liked by the citizens of Bangalore who have to vote for BJP in the upcoming BBMP election when there is no Modi factor influencing the voting decision.
For the medium and long term we can discuss what kind of monitoring can be brought in to reduce the exploitation of the drivers by the app aggregators
Government should encourage competing app like Myn or encourage Tata Neu to start a new vertical or use the ONDC platform and recommend drivers to register with them. If these apps donot turn rogue like Uber/Ola and agree to follow the regulations such as
- Sharing 85% of fare with drivers for normal charge
- Sharing 75% of surge pricing with drivers
- Submitting to an audit by a regulatory agency and committing to a regime of penalties
then there will be a win-win situation for the citizens and the drivers.
I request honourable MP Mr Tejasvi Surya to consider these suggestions.
Naavi
