HomeLifestyleKarnataka government fixes 5% service charge for mobile app-based auto services

Karnataka government fixes 5% service charge for mobile app-based auto services

The transport department has fixed the fee in consultation with various stakeholders.

The transport department has fixed the fee in consultation with various stakeholders. , photo credit: file photo

The Transport Department on Friday (November 25) issued a notification to fix service charges for auto services provided by mobile app-based taxi aggregators such as Ola, Uber and Rapido. It added that the aggregators may collect a service charge of 5% of the auto fare as decided by the authorities plus applicable GST from the users.

Officials say that currently aggregators charge 15% as service fee (including 5% GST) as directed by the Karnataka High Court. The fare will be reduced after the service fee is fixed.

Transport Secretary NV Prasad said, “The service fee has been prescribed as per the provisions available in the rules, and is applicable with immediate effect. Taxi aggregators will have to follow the rules for charging service fee from passengers.

In 2021, for the city of Bengaluru, the Regional Transport Authority fixed a base fare of ₹30 for the first 2 km and ₹15 for every km thereafter.

The notification issued on Friday said that the regional transport authorities (headed by deputy commissioners) have been directed to consider service charges and GST while fixing the fare of autos.

meeting with stakeholders

The transport department has fixed the fee after holding consultations with various stakeholders such as taxi aggregators, auto driver unions and the general public as per the directions of the Karnataka High Court.

The department had in the first week of October directed the shutdown of auto services after receiving complaints against taxi aggregators for charging exorbitant fares. Aggregators were accused of charging a base fare of ₹100 for 2 km. The aggregators challenged this order in the Karnataka High Court. The court allowed it to collect 15% (including 5% GST) as user fee for providing auto services.

mixed response

Taxi aggregators are likely to face problems due to this move of the state government. Sources in aggregators said that 5% service charge is not sustainable for them.

An Uber spokesperson said, “We are yet to see the government’s proposal.” But as we mentioned earlier, any commission shortfall must be financially sustainable in order to run the operation. If our costs cannot be covered through commissions, we need to find ways to reduce those costs which can affect the experience for drivers and riders. During the consultation meeting, the aggregators had demanded user fee from 20% to 25%.

Some commuters using app-based auto services said 5% of the auto fare is reasonable. “It is good that the state government has finally fixed the service charges. A service charge of 5% plus applicable GST appears to be affordable for users. We hope that the aggregators will follow the new rule.

During the consultation meeting with the general public, many urged the state government to come up with its own mobile app, which protects the interests of the passengers as well as the drivers.

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