New guidelines for cab aggregators

Source: By Pranav Mukul: The Indian Express

The Ministry of Road Transport and Highways has issued the Motor Vehicle Aggregator Guidelines, meant to regulate the hitherto unregulated cab aggregator segment, which is mainly controlled by two players — the US-based Uber and Bengaluru-based Ola Cabs. In the guidelines the government has laid down various procedures pertaining to conditions for grant of licence to an aggregator, compliance with regard to vehicles, regulation of fares, etc.

As part of the Motor Vehicles (Amendment) Act, 2019, the government provided that an aggregator will need to be issued a licence to operate by the respective state government and that the states will follow the guidelines issued by the Centre.

The aggregator has been asked to ensure that every driver is provided with a health insurance integrated with the aggregator for an amount not less than Rs 5 lakh with base year 2020-21 and increased by 5% each year. Additionally, a term insurance of Rs 10 lakh must also be provided to each driver. The aggregator will also need to conduct refresher training programmes for the drivers once a year. A compulsory five-day training of the drivers, which will have to be done at the time of their induction as well, will include topics such as efficient use of the app, provisions of the Motor Vehicles Act, 1988, careful driving, motor vehicle maintenance, on-road safety and first-responder training, terms and conditions of the contract with the aggregator, gender sensitisation, etc.

The aggregator will need to make its app accessible in English and Hindi as primary languages for the rider along with one official language of the relevant state, where the official language is not Hindi.

Additionally, the app will have to be accessible in a language that is understandable by the driver. In terms of the data generated on the app, the aggregators will have to store such data on a server in India and such stored data will need to be stored for a minimum of three months and maximum of 24 months from the date on which such data was generated. This data will also have to be made available to the state government, as per due process of law, but the guidelines stipulate that any data related to customers shall not be disclosed without the written consent of the customer.

The aggregators have been allowed to provide pooling facilities to customers, whose details and KYC information is available. Further, for women passengers seeking to avail ride-pooling, the aggregators will need to provide the option to pool only with other women passengers. In cases of non-transport vehicles being aggregated for ride-pooling, a limit of four ride-sharing intra-city trips on a calendar day and two ride-sharing inter-city trips per week for each vehicle with the driver has been stipulated.

The guidelines stipulate that the city taxi fare indexed by WPI for the current year shall be the base fare chargeable to customers availing aggregator service. In states where a city taxi fare has not been determined an amount of Rs 25/30 will be the base fare. The base minimum fare chargeable to customers will be for a minimum of 3 km to compensate for dead mileage and distance travelled and fuel utilised for picking up the customers. The aggregator has been allowed to charge a fare 50% lower than the base fare and impose a maximum surge pricing of 1.5 times the base fare. This has been done to enable and promote asset utilisation, which has been the fundamental concept of transport aggregation, and also to substantiate the dynamic pricing principle, which is pertinent in ensuring asset utilisation, in accordance with the market forces of demand and supply.

Additionally, the guidelines say that the driver of a vehicle shall receive at least 80% of the fare applicable on each ride, thereby capping the commission charged by the aggregators at 20%. Currently, the commission rates range between 25-35% and differs from city to city. On cancellation of rides, by either a driver or a rider, when it is made without valid reason, a penalty of 10% of the total fare not exceeding Rs 100 shall be imposed. The cancellation penalty imposed on the rider will be divided between the driver and the aggregator in the proportion of the decided commission rate.