Even 10% fare is a loss: Cab aggregators on Karnataka government's 5% service fee for autos

In the first batch of petitions, the court had passed an interim order on November 6, 2021, permitting collection of 10% above the base fare fixed

Transport aggregators Ola and Uber have filed fresh petitions challenging the November 25 fare notification by the transport department on auto-rickshaw cab services.

The matter came up before the bench presided over by Justice C M Poonacha and was adjourned to Tuesday for the consideration of the interim prayer as prayed by the petitioners.

In the first batch of petitions, the court had passed an interim order on November 6, 2021, permitting collection of 10 per cent above the base fare fixed. The court has adjourned the hearing in these petitions by two weeks and also extended the interim order.

In the fresh petitions, it was stated that the state government has issued a notification on November 25, 2022, after holding consultations, directing the transport authorities to fix the ‘service fee’ that aggregators are entitled to charge for services provided.

According to the notification, aggregators with a valid licence may charge up to five per cent fare chargeable to the auto-rickshaw cab. The petitioners submitted that the guidelines issued by the central government allow up to 20 per cent collection of service fee from the rider.

The service fee charged does not come within the meaning of fare and hence, the state government does not get competence of authority under the prevailing rules to prescribe or regulate the amounts to be charged by them, the petitioners stated.

They also submitted that even by charging at 10 per cent above the base fare, the aggregators are incurring losses.

On the other hand, it was submitted on behalf of the state government that central guidelines are a mere suggestion, while the powers to frame rules rests with the state government. The state submitted that the fare is fixed in terms of state guidelines and also in public interest.