Uber has permanently suspended its surge pricing in Delhi after Delhi Governments strict warnings. The rates will not exceed the government prescribed rate.
This issue came during the odd-even scheme in Delhi when both Uber and Ola were charging high fares. Delhi government was receiving complaints from the passengers regarding the surge pricing and then warnings were given to Uber and Ola.
Prescribed rate by the government are INR 12.50/Km for Radio Taxis, Rs 14/Km for Non-Ac and 16/Km from Ac cabs. Fixed rate of Rs 23/Km for radio taxis and night fares includes additional 25% applicable only b/w 11pm to 5am.
The announcement received series of mixed reactions from the people and the media. Customers appreciated the change and market analyst believed it as anti free market and startup discouragement. According to Uber, it will effect their demand-supply economics of cabs. Surge pricing is an important part for cab companies as they can have profits, discounts to users and commission to drivers.
Bangalore also faced the issue regarding surge pricing. Both Uber and Ola cabs were seized in Bangalore after receiving complaints. In the past few weeks more than 70 cabs were seized out of which 50 cabs were of Uber. Suspension of surge pricing will come as a big blow to cab aggregators, as during non surge times and cash on the surge periods it runs low on charges.