App-based taxi aggregators have edged out traditional and fleet taxis in the price war. For the first time since fleet taxi services began in the city, a taxi company reduced the fare of its taxi service, with permission from the transport authorities. The development indicates the growing popularity of app-based cabs.
The state transport authority (STA), chaired by the transport secretary of the state, in its recent meeting, decided to allow Meru Cab, the second-biggest fleet taxi operator in the city, to bring down cab fares for the next six months on an experimental basis.
The transport authority decided the fare of air conditioned blue-silver Cool Cabs would be applicable to Meru cabs. It means commuters will have to pay a basic fare of Rs28 for the first 1.5 km and Rs18.55 for every subsequent kilometre.
Since 2007, MERU Cabs has been operating its mid-segment sedan taxis in Mumbai under the Fleet Taxi Scheme 2005. It has more than 1,000 taxis that can be booked via an app or on the phone.
Interestingly, fare of fleet cabs in the city had gone up in May 2015. Besides approving the fare hike to them, the STA had revised their fare structure introducing the first stage of 4km, instead of the earlier 1.5km. As a result of this, for cabs costing less than Rs8 lakh, the fare was fixed at Rs90 and Rs22 for subsequent kilometers. While Rs100 was the base fare and Rs25 the subsequent kilometre fare, for bigger vehicles worth Rs8-12 lakh.
A senior official from the Motor Vehicle Department said the fleet taxi fare structure was revised on the demand of fleet operators. They were persuading STA in 2012 to revise the structure after the tariff of black-and-yellow taxis had been hiked, according to the Hakim panel formula.
Fleet cabs, however, are now facing fierce competition from app based taxis of aggregators like Ola and Uber, which offer air-conditioned taxis with basic fares as low as Rs 5-6 km. The aggregators, who started their services around December 2014, are offering mid-segment Sedans at the base fare of Rs11-13 per km, for which fleet taxi operators charge Rs 22-25 per kilometers.
MERU Cabs, however, claimed they had not increased their cab fare after last year’s fare revision. “When the fare was increased by the government, we didn’t do it, even though it was an official decision. We continue to charge the same old base fare and subsequent kilometre fare for the benefit of consumers,” said Siddhartha Pahava, CEO of MERU Cabs.