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			<b>Photo: Shutterstock</b>The Union transport ministry has backed the idea of surge pricing on premium cabs by taxi-hailing firms such as Ola and Uber, while suggesting that states can continue to regulate prices of smaller cabs that are seen as an alternative to public transport.</div>
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			The guideline come at a time when Uber founder Travis Kalanick is in New Delhi, pitching to the government to ease rules to expand his business in India, the last open market after it was muscled out of China.&nbsp;</div>
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			It also shows the government has not been moved by the plea of local player Ola, which had demanded its intervention to stop Uber from dumping capital in the country. The guidelines do not mention preventing taxi aggregators undercutting the price of rides, a grouse of Ola founder Bhavish Aggarwal, who had sought government intervention earlier this month.</div>
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			&ldquo;You might call it capital dumping but it&rsquo;s a very unfair playing field for the Indian start-ups and something needs to be done about it. The consumer internet industry because it largely carries a monopolistic stake, a lot of irrational capital is thrown into land grab,&rdquo; Aggarwal said at a conference in Bengaluru.&nbsp;</div>
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			The taxi aggregator business has a winner-take-all model, where the operator with the largest network of users and cabs ends up dominating the market. In China, Uber was edged out despite losing over $200 million a month to grow its market share against its rival Didi Chuxing.</div>
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			The December 15 guideline gives the state governments the option to regulate these aggregators, who have to acquire licences in individual states to run their service. Uber has to apply for a licence in Karnataka, one of its largest markets after it lost a case in the Karnataka High Court, where it questioned the local government&rsquo;s framing of new rules to regulate the company.</div>
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			Uber declined comment, while Ola did not respond to emails and calls.</div>
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			Both Uber and Ola stand to gain with the government&rsquo;s move to allow surge pricing as they are adding more sedans which exceed the four-metre length clause for cars to be termed as premium cabs. Ola has partnered with Mahindra and Mahindra to use the Verito cars on its platform by drivers, while Uber has partnership with Toyota for its Etios, both of which are sedans.&nbsp;</div>
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			Ola, which recently launched its in-car infotainment platform said it is offering its service first to Prime users which consists only of sedans.&nbsp;</div>
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			The new guidelines also seeks to encourage buses and two-wheeler taxis on these platforms, with the intention of reducing congestion and improve efficiency of these vehicles. It also allows private vehicles to be converted as taxis to run on these platforms.&nbsp;</div>
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Uber declined comment, while Ola did not respond to emails and calls

Photo: Shutterstock

India's transport ministry has backed the idea of surge pricing on premium cabs by taxi hailing firms such as Ola and Uber, while suggesting that states can continue to regulate prices of smaller cabs that are seen  as alternative to public transport.The guidelines comes at a time when Uber founder Travis Kalanick is in New Delhi, pitching to the government to ease regulations to expand his business in India, the last open market after it was muscled out of China. It also shows the government has not been moved by the plea of local player Ola, which had demanded its intervention to stop Uber from dumping capital in the country.  The guidelines also does not have any mention to prevent taxi aggregators to undercut the price of rides, a grouse of Ola founder Bhavish Aggarwal, who had sought government intervention earlier this month."You might call it capital dumping but it's a very unfair playing field for for the Indian startups and something needs to be done about it. The consumer Int

India's transport ministry allows surge pricing on premium Ola, Uber rides

Uber declined comment, while Ola did not respond to emails and calls

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