The recent central guidelines on cab aggregators, such as Ola and Uber, will provide uniformity in regulations across India; it will not only help the firms grow steadily, but also help states get more revenue, said Union road transport and highways secretary Giridhar Aramane in an interview, refuting cab aggregators’ concerns over increasing compliance burden amid covid-19, and falling income due to the cap on commission and surge pricing. Edited excerpts:
What’s the main idea behind the Motor Vehicle Aggregator Guidelines, 2020?
Earlier every state or UT (Union territory) had separate guidelines. Some tried to impose restrictions such that running a cab aggregating business was not possible. If there are 30-40 regulators (states), we will end up having diverse regulations, making compliance burden high for Uber, Ola and other cab aggregators in future. It is essential that we regulate the regulator so that this innovative model is not killed. Certain incidents of Uber or Ola drivers misbehaving with customers, the question of safety of customers weighed very heavily. Some incidents highlighted necessity of imposing safety standards on drivers and aggregators. This was the main intention behind the rules.
States are likely to adopt the guidelines quickly as they know that providing uniformity will result in bringing them more revenue, rather than going ahead with a restrictive policy, and ending up with less business. There are incentives for states also, 2% over and above the fare, if they provide necessary infrastructure, such as parking, required by aggregators. It is a win-win for companies and states. Once state governments impose the rules uniformly, commuters will also benefit. With these regulations companies will see steady growth in business, without much hindrance from the regulator. The arbitrariness will disappear.
Do you see cab rides getting cheaper?
We discussed the issue of commission with Ola, Uber and driver representatives. We looked at the current scenario and determined that 20% will not hurt drivers, and incentivize companies, giving them huge money to develop the business. I don’t think it will hurt any player involved.
Cab aggregators’ main business is technological innovation. By sharing data seamlessly with others, regulators, a third party will ensure that drivers’ interest is served, that they don’t work overtime.. In fact, an overworked driver is a danger for the aggregator and the commuter. That’s why creating a platform where they can share the data anonymously is being thought of. I don’t think it is a problem.
This article was first published on livemint.com.