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Monday, Oct 14, 2019

Uber penalised Rs 30,000 for surge pricing

Mohali man was informed ‘fares are higher due to increased demand’ just five minutes before the ride which had been booked a day in advance.

chandigarh Updated: Aug 24, 2019 13:20 IST
Shailee Dogra
Shailee Dogra
Hindustan Times, Mohali
Uber, an app based cab service provider had charged 90% extra from a customer.
Uber, an app based cab service provider had charged 90% extra from a customer.(Reuters Photo)

Charging 90% extra in the name of surge pricing from a Mohali resident has cost Uber — an app-based cab service provider — dear.

Founding the firm guilty of “unfair trade practices”, the Mohali district consumer dispute redressal forum has penalised it Rs 30,000.

While Rs 10,000 will be paid to the complainant as compensation for mental agony and harassment, including the refund, and litigation expenses,Rs 20,000 are to be deposited to the consumer welfare fund.

Surge pricing, also referred to as dynamic pricing, is a strategy in which businesses set flexible prices for products or service based on current market demand.

Disposing of the complaint filed by Raman Kumar Soni, a resident of Phase 3B2, Mohali, the forum said: “The practice of charging excess fare than that of actual contracted fare at the time of advance booking, is unfair trade practice, which needs be deprecated.”

When Uber claimed it had already refunded around Rs 84, the forum ruled that it amounted to the firm’s admittance to having charged extra and said: “To keep a check on such unruly service providers, who commit breach of assurances, promises and commitments at the nick of time, they are required to be dealt with a heavy hand.”

Case dates back to Jan 2018

Soni on January 2, 2018, had booked an Uber cab in advance for 6am the following day to go the Mohali railway station. He was to board a train to Amritsar at 7:10 am.

Uber confirmed the ride with the fare range of Rs 94 to Rs 117 for that trip.

However, at 5:55am on January 3, Uber sent a message to Soni stating that “fares are higher due to increased demand”, and gave him an option to cancel the booking within five minutes without incurring any cancellation fee.

With no other means available to commute, Soni decided to take the ride. When the cab reached the station, the driver asked him to pay Rs 177. When Soni resisted, the driver allegedly used unparliamentary language. He finally paid the amount.

Not incorporated under Indian law: Uber

Soni in his complaint to the forum had named Uber, having its head office in Navi Mumbai, and Uber, Chandigarh, as the opposite parties.   

In its reply, Uber BV claimed it has been incorporated in Netherlands and not under Indian laws. It claimed it is not a service provider and only provides Uber App, which is a mobile application meant for connecting independent providers of transportation services with third party riders, like Soni.

BV stands for a private limited company in the Netherlands.

“Uber India does not have contractual relationship with driver partners using Uber App and even it does not employ or control users of Uber App. Uber BV is not a service provider, but just a market place which aims to bring riders in contact with driver partners,” said the firm, adding: “Uber BV which is the licensed operator of Uber App within territory of India has not been impleaded as a party and as such complaint deserves to be dismissed.”

However, the forum ruled that “Uber cannot escape from liability under the garb of hidden contract between them with the driver partner”.

 “Complainant or anybody else (layman) does not know intricacies of contract between Uber and its drivers. Rather as and when one avails online services through the known or branded concern, then he expects to have contract with this branded concern and not with the hidden partner of the branded concern,” stated the order.

The forum further held: “Ordinary layman like complainant cannot be denied his due by invoking intricacies of law. It is so because technicalities cannot come in the way of administration of justice to hapless consumers, who stand exploited like complainant in this case.”

‘An act of exploitation’

The forum ripped through the Uber’s argument that surge pricing was communicated to Soni. The forum observed the SMS was sent at 5:55am, just five minutes before the ride that had been booked a day in advance.

“Flashing of this message at the nick of time itself is an act of exploitation of consumer,” said the forum. “When a consumer had been asked one day in advance to pay fare in the range of Rs 94- Rs117 for the trip to be undertaken by him on the next day in early morning hours, then he will not at all expect payment of about twofold (Rs 177 in the present case) of minimum payable charges.”

First Published: Aug 24, 2019 00:05 IST

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