Karnataka decides 5% app fee for auto rides booked on apps, HC to take final call, Legal News, ET LegalWorld – Legal Firms


The Karnataka government on Friday decided to allow app-based aggregators to charge a convenience fee of 5% on customers who book auto rickshaw rides through their platforms in Bengaluru, senior officials told ET.

This is exclusive of the GST aggregators have to charge on the overall fare. A customer who uses an auto booked through the platform will have to pay a 5% GST on fare and service charge put together.

The government’s decision came after transport secretary NV Prasad, and transport commissioner SN Siddaramappa met chief minister Basavaraj Bommai and chief secretary Vandita Sharma. The government took a decision as it had to file an affidavit before the high court on Friday. The case is coming up for hearing before Justice CM Poonacha on Monday.

The decision marks a further 5% drop in service charges as operators are currently allowed to levy a 10% fee exclusive of GST.

The court is hearing writ petitions filed by Uber and Ola challenging an October 6 order of the transport department asking them to stop booking auto rides on their apps in Bengaluru. The order followed media reports that the aggregators were charging minimum fares of up to Rs 100. The state had capped the base fare at Rs 30.

The aggregators are still accepting bookings for auto rickshaw rides on the basis of an October 14 interim order of the high court, by Justice MG Shukure Kamal capping the convenience fee at 10%, exclusive of GST.

The transport department decided to have the chief minister’s views as hundreds of thousands of auto rickshaw rides are booked on aggregator platforms every day, and any decision would impact a large number of Bengalureans.

Last month, at a meeting called by transport authorities, the aggregators reportedly sought a convenience fee of 20% on auto fares, exclusive of GST.

The aggregators had also sought a flexi-fare — surge pricing in other words — but the government has shot down the demand.

In a statement, Uber spokesperson said, “We are yet to see the government proposal. But as we have mentioned earlier, any commission constraints should be financially sustainable to run operations. If our costs cannot be covered through commissions, we will have to find ways to offload costs that could impact the experience of drivers and riders.”

Uber, in a November 1 statement, said: “Currently, our commission in Bengaluru is capped at 10% of the fare collected. This is not financially sustainable. If our costs cannot be covered through commissions, we will have to find ways to offload costs that could impact the experience of drivers and riders. In the face of these commission caps, we may have to make the difficult decision to limit Uber Auto to select parts of Bengaluru where the service is viable.”


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