Uber agrees to limit surge pricing in Delhi

Uber has reportedly agreed to limit its fares in Delhi and abide by the rates set by the state government. 

The ride-hailing app said that its fares would not exceed the prescribed rates, effectively placing an upper limit on surge pricing.

The announcement comes a month after the Delhi government barred ride-hailing apps like Ola and Uber from imposing surge pricing during the second phase of the city's odd-even traffic restrictions, which had been a test to reduce congestion by limiting the number of cars on the road.

The government also warned of strict action including the impounding cabs and cancellation of permits against those found to be violating the rules, and said that it could make the ban permanent.

Uber had temporarily suspended surge pricing until April 30 but reintroduced it soon after. The company also defended the dynamic pricing model by arguing that it was necessary to ensure that cabs were available on the roads during peak demand. Uber's Indian rival Ola says it has already stopped surge pricing.

"With prejudice to all our rights and contentions, we would like to humbly submit that the fare charged per kilometre on the Uber platform within Delhi will not exceed the government-prescribed fare applicable in Delhi,” said Gagan Bhatia, the company’s general manager (North-Uber India).

This means that Uber's surge pricing will be restricted to an upper limit, rather than being completely eliminated. According to the government-approved rates, Uber charges Rs 12.50 per kilometre for economy radio taxis, Rs 14 and 16 per kilometre for non-AC and AC black-and-yellow top taxis, and Rs 23 per kilometre for sedan radio taxis with an LCD board. 

In comparison, Uber charges a base fare of Rs 40, along with Rs 7 per kilometre and Rs 1 per minute for its hatchback UberGO, a base fare of Rs 55 and Rs 9 per kilometre and Rs 1 per minute for UberX. 

A similar model was also recently adopted in Karnataka, where the state government fixed a price ceiling for taxi fares.  

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