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New law will bring fares of app-based taxis under new Road Transport Bill

Under a law being proposed, the govt wants these "on demand transportation technology aggregators" to register as taxi operators

Jyoti Mukul & Arijit Paladhi  |  New Delhi 

The Centre plans to bring web-based taxi operators under the purview of the proposed Road Transport and Safety legislation and place their fare structure under the scrutiny of the proposed National Transport Authority. Currently, mobile application-based taxi operators are not regulated since they are not registered as taxi service.

Under a law being proposed, the government wants these "on demand transportation technology aggregators" to register as taxi operators. Section 162 of the Draft Road Transport and Safety Bill 2014 says any operator of public transport, or an aggregator, will be required to provide information relating to the fare structure, the total number of journeys undertaken by passengers and the distance covered by vehicles used by the operator in these services.

Unlike conventional taxi service operators, mobile application-based aggregators such as Uber and Ola do not own the vehicles but act as digital intermediary or marketplace for a passenger to connect with drivers. Their fare structure could vary every day or every hour. Uber, for instance, has a surge pricing model where it charges customer based on the demand and availability of a service.

The provisions in the Bill likely to be tabled in Parliament during the current session will make it mandatory for such service operators to register as taxi operators. They would not be allowed to own, lease any vehicle, employ any drivers or represent themselves as a taxis service unless they register. They also need to be compliant with the Information Technology Act.

Uber, which had been banned by the Delhi government after the alleged rape of a woman executive by one of its taxi drivers but still operates in the city, had also faced service tax notice on it. The company, however, has announced a fare hike of 5-7 per cent on account of service tax. In a mail to its customers, Uber said: "In the Union Budget 2015-2016 presented by Finance Minister Arun Jaitley, an amendment was made to Service Tax rules. This change requires Uber - as an aggregator, on behalf of driver-partners - to collect and remit service tax on fares for all rides on the platform."

The fare structure has been revised accordingly to cover service tax applicable.


THE PROPOSED LAW
  • Under a law being proposed, the govt wants these "on demand transportation technology aggregators" to register as taxi operators
  • Any operator of public transport, or an aggregator, will be required to provide information relating to fare structure, total number of journeys undertaken by passengers and distance covered
  • They would not be allowed to own, lease any vehicle, employ any drivers or represent themselves as a taxis service unless they register
  • They also need to be compliant with the information Technology Act

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First Published: Wed, April 22 2015. 00:30 IST
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