Delhi government to penalise Ola and Uber cabs for surge pricing during odd-even car restrictions

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The Delhi government has said that it will take “strict action” against Uber and Ola after customers faced heavy surge pricing on the first working day of Delhi’s odd-even car restrictions. The two ride-hailing apps had reportedly hiked their rates by three to five times of the regular fare.

Both companies argue that surge pricing is determined by an algorithm that factors in the demand for cabs at a time, rather than decided by them. “Our goal: Get you a ride within minutes, at the push of a button ?” even on the busiest days. Surge pricing makes this possible, almost always,” Uber India tweeted in response.

The odd-even scheme, which was piloted in January, hopes to curb air pollution and traffic, by placing restrictions on the use of cars on alternate days. In the first phase, ride-hailing companies like Uber and Ola had started carpooling services to encourage people to travel on their cabs instead of taking their own private vehicles.

This time however, residents have been complaining about surge pricing. Delhi chief minister Arvind Kejriwal tweeted that the state government had received complaints about Uber and Ola, and would impound cars which charged more than the government-prescribed taxi rates, with the drivers facing permanent cancellation of their licenses.

On Twitter, numerous office-goers complained about surge pricing and the non-availability of cabs.

Uber has responded to the charges with a series of tweets, in which it argued that less than 8% of its Delhi trips in the last three days and during the first phase of the odd-even scheme in January, were on surge pricing. It also said that the average surge rate was less than two times, despite which Uber was more affordable than radio taxis and government rates.

The Delhi government isn’t alone in getting complaints about surge pricing. Two weeks ago, the Karnataka state government banned surge pricing and established a price ceiling for air conditioned and non-air conditioned cabs. Subsequently, several Ola and Uber cabs have been impounded for overcharging customers. The state of Maharashtra is also reportedly considering a similar ban.

An online petition started by a Delhi customer against surge pricing by Uber has received 55,500 signatures of support and another one against Ola has got over 20,000 signatures.

Mashable has reached out to Ola and Uber for comment.

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