End the confusion

Regulate taxi aggregators to improve services

Disturbing signals are emerging from the government on the question of how it should treat taxi aggregators offering services using technology and the global positioning system. According to some reports, the ministry of road transport and highways wishes to make it compulsory for taxi aggregators to calculate their fares only by using meters just as other operators do. This can be a counterproductive move negating the advantages that passengers, taxi operators and aggregators derive from technology. While there is a clear case for effective regulation and ensuring transparency in the manner in which fares are fixed, it is illogical to force taxi aggregators to use meters just because some other operators do the same. Instead, the government should expedite the move to amend the Motor Vehicles Act to bring taxi service aggregators like Uber and Ola under regulation. The proposed legislative change, as outlined in Parliament last week, should be welcome because it will end the uncertainties that have been troubling these smartphone-based innovations.

However, vigil must be maintained to ensure that the regulation does not end up effectively removing a new choice for consumers to secure the turf for existing taxi operators, who help themselves more than they help their customers. City dwellers, plagued by the inability to readily access metered taxis, have found the new services a boon. However, not everything is right with the way these providers operate and it is these issues that need to be resolved. The foremost among these is the practice of levying surge pricing whereby at times of peak demand rates can go up substantially. The aggregators say that surge pricing offers an incentive to taxi drivers to move to areas where demand is overtaking supply and thus address the shortage. On the other hand, there is a feeling that the practice is an excuse for charging more while officially claiming to charge a lower rate. This needs to be looked into. The problem with surge pricing is not the idea itself - a mechanism whereby supply rises to meet additional demand in response to price signals. There is an issue of suspicion over how fares are calculated and charged in a non-transparent manner. The best way out of this can be for the aggregators to open their platforms to technical experts appointed by regulators, who can certify that these run fairly and transparently.

It is important for taxi aggregation services to run smoothly and without controversy as they reduce the need for people to take out their own cars and enable a system of car sharing to emerge. This will help ease chronic urban traffic congestion caused foremost by people having to use their own cars in the absence of convenient public transport. It is, therefore, important for transport regulators to encourage more taxi drivers and operators to come under some kind of mobile phone-based aggregation (perhaps run by a city's taxi association), so that taxi drivers waste less of their time, earn more and do not have to refuse passengers for fear of not getting a customer on their return journey.