03/06/2016 3:33 PM IST | Updated 15/07/2016 8:27 AM IST

New Government Proposal Wants Ola, Uber To Get Fare Meters, End Surge Pricing

In this March 29, 2016 photo, Ola cabs, left, waiting for customers are parked next to other cars in Kolkata, India. Aiming to wrest control of India’s booming taxi market, two cab-hailing smartphone apps, Uber and Ola, are promising hundreds of millions in new investments while also facing off with one another in court. (AP Photo/ Bikas Das)

Taxi aggregators like Ola and Uber may soon be brought under the purview of the Motor Vehicles Act, according to the government's draft proposals to amend the law. According to a report in Hindustan Times, the road transport ministry might create a separate category for these aggregators called "intermediaries".

This might mean the end of "surge pricing", which pushes up fares for these taxis when there is high demand.

“They will have to follow the rules framed for them under the MV Act," an unnamed official told HT. "They will have to abide by fares prescribed by respective states, which can fix an upper cap beyond which the aggregator cannot charge."

As "intermediaries", they will also come under the purview of the Information Technology Act, 2000.

Eight state transport ministers will meet later this June in Dharamsala to take a "final call". If the proposals are given the green signal, it would also mean that Ola and Uber cabs will need to have fare meters as under city permits, and the drivers will have to wear a dress code.

The Indian government has been trying to get the taxi aggregators to follow several provisions of the MV Act for some time now, with several reports suggesting that the Centre was looking for ways to rein in these taxi aggregators and force them to ply with city permits. The road transport ministry had earlier said that the aggregators will be regulated by the state governments.

More On This Topic