Surge pricing back in Delhi after odd-even, Kejriwal warns of action

On the day a ban on diesel-run cabs came into effect in the National Capital Region, taxi aggregator Uber brought back surge pricing, prompting chief minister Arvind Kejriwal to warn the operator of “strong action”.

On the day a ban on diesel-run cabs came into effect in the National Capital Region, taxi aggregator Uber brought back surge pricing on Sunday, prompting chief minister Arvind Kejriwal to warn the operator of “strong action”.

An employee walks at the office of ride-hailing service Uber in Gurugram, previously known as Gurgaon, on the outskirts of New Delhi, April 19, 2016. REUTERS/Anindito Mukherjee

Uber had introduced the provision during the second phase of the odd-even scheme, and the move was objected to by commuters. Kejriwal had asserted that such demand-linked hikes would be banned permanently.

Surge pricing is a business practice in which companies charge higher rates than normal to encourage more drivers to offer rides when demand for taxis outstrips supply.

A day after the second phase of the odd-even scheme aimed at curbing air pollution ended on April 30, commuters across the city who availed of the services of the app-based cab firm found that surge pricing was back.

When contacted, an Uber spokesperson confirmed the development, saying that suspension of surge pricing was only a “temporary” measure. The move came even as the ban on diesel-run cabs affected nearly 27,000 vehicles.

Kejriwal had recently described as “daylight robbery” taxi aggregator Ola and Uber’s business model.

Read: Delhi govt cracks down on Ola, Uber; to ban surge pricing permanently

A senior Delhi government official said action will be taken against these companies based on complaints. “We will impound their cabs,” the official said.

While an immediate confirmation could not be obtained from Ola, another app-based service, its app displayed a message saying peak time charges may be applicable during high demand hours and will be conveyed during the booking which “enables us to make more cabs available to you”.

Ola displayed the disclaimer during the odd-even period as well, although it did not invoke peak-pricing till Saturday.

Uber and Ola hiked rates by at least three times during odd-even, and commuters complained they had to pay “astronomical rates” because of surge pricing. They had to withdraw the move after the government’s threat to cancel licences and impound cabs.