Media & Entertainment

India sets rules for commissions, surge pricing for Uber and Ola

Comment

Image Credits: Indranil Aditya / NurPhoto / Getty Images

Ride-hailing firms such as Ola and Uber can only draw a fee of up to 20% on ride fares in India, New Delhi said in guidelines on Friday, a new setback for the SoftBank-backed firms already struggling to improve their finances in the key overseas market.

The guidelines, which for the first time bring modern-age app-based ride-hailing firms under a regulatory framework in the country, also put a cap on the so-called surge pricing, the fare Uber and Ola charge during hours when their services see peak demands.

According to the guidelines, Ola and Uber — and any other app-operated, ride-hailing firm — can charge a maximum of 1.5 times of the base fare. They can, however, choose to offer their services at 50% of the base fare as well. The rules also state that drivers will not be permitted to work for more than 12 hours in a day, and that the companies need to provide them insurance cover.

Uber and Ola have not previously publicly shared precisely how much they charge their drivers for each ride, but industry estimates show that a driver partner with either of these firms makes up to 74% of the ride fare, after paying taxes. The new guidelines say drivers should get to keep at least 80% of fares.

The cap on the ride fare and implied insurance costs will raise operating costs in India for Uber and Ola, both of which have eliminated jobs in recent months amid the pandemic to trim costs. The South Asian nation, which has attracted many giant international firms in recent years as they look for their next growth market, in the meantime has entered an unprecedented recession.

But not everything about the guidelines will hurt Uber and Ola, both of which had no comment to share on Friday. The rules will enable the companies to offer pooling (shared car) services on private cars, though there is a daily limit of four intra-city rides on such cars, and two weekly inter-city rides.

Ujjwal Chaudhry, an associate partner at Bangalore-based marketing research consulting firm Redseer, said the guidelines by the government will have a mixed impact.

“While it is positive in terms of formalizing the sector as well as increasing the consumer trust on aggregators through improved safety regulations. But, overall the impact of these guidelines on the ecosystem growth are negative as capping surge and platform fee will ultimately lead to reduced earnings for 5 Lac (500,000) drivers (currently on these platforms) and will also lead to increased prices and higher wait times for the 6-8 crore (60 to 80 million) consumers who use it for their mobility and commute needs,” he said in a statement.

The rules also address a range of other factors surrounding a ride. For instance, under no circumstance can the cancellation fee imposed on a rider or driver be more than 10% of the total fare, and the fee cannot exceed 100 Indian rupees, or $1.35. Also, female passengers looking for a pooled service will have the option to share the cab with only female passengers, the rules say. Cab aggregators are also required to establish a control room with round-the-clock operations.

Ola and Uber dominate the app-based ride-hailing market in India. Both the companies claim to lead the market, though SoftBank, a common investor, said recently that Ola had a slight lead over Uber in India.

More TechCrunch

The official launch comes almost a year after YouTube began experimenting with AI-generated quizzes on its mobile app. 

Google is bringing AI-generated quizzes to academic videos on YouTube

Around 550 employees across autonomous vehicle company Motional have been laid off, according to information taken from WARN notice filings and sources at the company.  Earlier this week, TechCrunch reported…

Motional cut about 550 employees, around 40%, in recent restructuring, sources say

The keynote kicks off at 10 a.m. PT on Tuesday and will offer glimpses into the latest versions of Android, Wear OS and Android TV.

Google I/O 2024: Watch all of the AI, Android reveals

It ran 110 minutes, but Google managed to reference AI a whopping 121 times during Google I/O 2024 (by its own count). CEO Sundar Pichai referenced the figure to wrap…

Google mentioned ‘AI’ 120+ times during its I/O keynote

Here are quick hits of the biggest news from the keynote as they are announced.

Google I/O 2024: Here’s everything Google just announced

Google Play has a new discovery feature for apps, new ways to acquire users, updates to Play Points, and other enhancements to developer-facing tools.

Google Play preps a new full-screen app discovery feature and adds more developer tools

Soon, Android users will be able to drag and drop AI-generated images directly into their Gmail, Google Messages and other apps.

Gemini on Android becomes more capable and works with Gmail, Messages, YouTube and more

Veo can capture different visual and cinematic styles, including shots of landscapes and timelapses, and make edits and adjustments to already-generated footage.

Google gets serious about AI-generated video at Google I/O 2024

In addition to the body of the emails themselves, the feature will also be able to analyze attachments, like PDFs.

Gemini comes to Gmail to summarize, draft emails, and more

The summaries are created based on Gemini’s analysis of insights from Google Maps’ community of more than 300 million contributors.

Google is bringing Gemini capabilities to Google Maps Platform

Google says that over 100,000 developers already tried the service.

Project IDX, Google’s next-gen IDE, is now in open beta

The system effectively listens for “conversation patterns commonly associated with scams” in-real time. 

Google will use Gemini to detect scams during calls

The standard Gemma models were only available in 2 billion and 7 billion parameter versions, making this quite a step up.

Google announces Gemma 2, a 27B-parameter version of its open model, launching in June

This is a great example of a company using generative AI to open its software to more users.

Google TalkBack will use Gemini to describe images for blind people

Firebase Genkit is an open source framework that enables developers to quickly build AI into new and existing applications.

Google launches Firebase Genkit, a new open source framework for building AI-powered apps

This will enable developers to use the on-device model to power their own AI features.

Google is building its Gemini Nano AI model into Chrome on the desktop

Google’s Circle to Search feature will now be able to solve more complex problems across psychics and math word problems. 

Circle to Search is now a better homework helper

People can now search using a video they upload combined with a text query to get an AI overview of the answers they need.

Google experiments with using video to search, thanks to Gemini AI

A search results page based on generative AI as its ranking mechanism will have wide-reaching consequences for online publishers.

Google will soon start using GenAI to organize some search results pages

Google has built a custom Gemini model for search to combine real-time information, Google’s ranking, long context and multimodal features.

Google is adding more AI to its search results

At its Google I/O developer conference, Google on Tuesday announced the next generation of its Tensor Processing Units (TPU) AI chips.

Google’s next-gen TPUs promise a 4.7x performance boost

Google is upgrading Gemini, its AI-powered chatbot, with features aimed at making the experience more ambient and contextually useful.

Google reveals plans for upgrading AI in the real world through Gemini Live at Google I/O 2024

Veo can generate few-seconds-long 1080p video clips given a text prompt.

Google’s image-generating AI gets an upgrade

At Google I/O, Google announced upgrades to Gemini 1.5 Pro, including a bigger context window. .

Google’s generative AI can now analyze hours of video

The AI upgrade will make finding the right content more intuitive and less of a manual search process.

Google Photos introduces an AI search feature, Ask Photos

Apple released new data about anti-fraud measures related to its operation of the iOS App Store on Tuesday morning, trumpeting a claim that it stopped over $7 billion in “potentially…

Apple touts stopping $1.8B in App Store fraud last year in latest pitch to developers

Online travel agency Expedia is testing an AI assistant that bolsters features like search, itinerary building, trip planning, and real-time travel updates.

Expedia starts testing AI-powered features for search and travel planning

Welcome to TechCrunch Fintech! This week, we look at the drama around TabaPay deciding to not buy Synapse’s assets, as well as stocks dropping for a couple of fintechs, Monzo raising…

Inside TabaPay’s drama-filled decision to abandon its plans to buy Synapse’s assets

The person who claimed to have stolen the physical addresses of 49 million Dell customers appears to have taken more data from a different Dell portal, TechCrunch has learned. The…

Threat actor scraped Dell support tickets, including customer phone numbers

If you write the words “cis” or “cisgender” on X, you might be served this full-screen message: “This post contains language that may be considered a slur by X and…

On Elon’s whim, X now treats ‘cisgender’ as a slur