Government

Uber, Ola Cabs Suspend Surge Pricing in Delhi After Kejriwal Threatens Crackdown

Arvind Kejriwal during the India Against Corruption movement. His cap reads 'I want full freedom'. Credit: Wikimedia Commons

Arvind Kejriwal during the India Against Corruption movement. His cap reads ‘I want full freedom’. Credit: Wikimedia Commons

New Delhi: A day after Delhi Chief Minister Arvind Kejriwal warned that his government would take “strong action” against app-based taxis, Uber and Ola cabs announced that they would temporarily suspend their surge pricing mechanisms within the city with immediate effect.

Surge pricing, which a number of auto rickshaw and other private transport unions have complained about, is a mechanism that most online cab aggregators use in order to ensure a steady presence and supply of taxis within a city.

“Given the threat to the livelihood of our partners, at the expense of reliability, we are temporarily suspending surge with immediate effect,” the Uber Delhi twitter account tweeted on late Monday afternoon.

The last few days have seen public and private transport take centre-stage in Delhi’s public sphere, with the RSS-backed Bharatiya Mazdoor Sangh (BMS) giving a call for a strike. The BMS announced that several auto rickshaw unions would go on strike on Monday, which is when the second phase of the Delhi government’s odd-even plan would be put to the test, in order to protest against the underpricing of Uber and Ola Cabs.

Not to be outdone, Ola Cabs also followed quickly. The tweet that they put out, however, made it appear less as if the decision was a reaction to the events of the last two days and more about how it was “in support of the Govt’s #OddEven intiative”.

In Karnataka, a different picture

Delhi isn’t the first state that online taxi aggregators such as Uber and Ola Cabs have faced pressure over surge pricing. Earlier this month, the state of Karnataka put into effect a new set of rules that effectively curtailed surge pricing mechanisms by establishing a price ceiling on which Uber and Ola could charge fares.

In Bangalore, however, Uber and Ola haven’t given in without a fight: a number of people have pointed out that they continue to carry out surge pricing in direct defiance of the state’s new rules. Uber has also filed its objections with the Karnataka government and has said that it continues to work with the government in connection with the already “notified regulations”.