20th June 2024

The Karnataka Excessive Court docket on Monday upheld the state authorities’s order capping the service cost levied by ride-hailing platforms on customers of auto rickshaws in Bengaluru at 5% of the bottom fare.

Justice Suraj Govindaraj, whereas dismissing the petitions from the app-based aggregators difficult the federal government notification, mentioned the platforms had been entitled to gather a 5% service cost over and above the bottom fare mounted.

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Transport minister R Ramalinga Reddy mentioned the judgement would profit 1000’s of residents of Bengaluru who depend on autos for his or her day by day commute. The judgement, he added, would facilitate clean operation of app-based auto rides.
“I’ve additionally requested my division officers to file a caveat within the excessive court docket to uphold public curiosity,” the minister instructed ET.

Submitting of a caveat would be sure that the court docket wouldn’t move any order with out listening to the federal government if the aggregators problem the single-judge bench’s judgement earlier than a division bench.

The state transport division had, on November 25, 2022, issued a notification capping the service fees at 5% on the bottom fare.

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These hailing auto companies utilizing apps additionally should pay GST on the relevant charges. GST and repair fees don’t apply to autos employed exterior of apps.App-based ride-hailing platforms Uber, Ola and Rapido challenged the notification arguing that the Motor Car Aggregator guidelines allowed them to cost a 20% fee together with a surge value throughout peak hours.

The transport division and aggregators had been on a divergent path about how a lot service charge to gather from customers of auto rickshaws. Uber and Ola had argued that aggregator tips in November 2020 coated auto rickshaws as nicely. The rules had been issued pursuant to an modification to the Motor Autos Act, 1988, the earlier 12 months.

The state transport division had all alongside maintained that the licences issued to petitioners beneath the Karnataka On-Demand Transportation Expertise Aggregators Guidelines, 2016, restricted their scope of operation to solely motor-cab rides.

In January 2023, Justice CM Poonacha on the Karnataka Excessive Court docket stayed the November 25 notification on the grounds that the federal government ought to have considered the aggregator tips the federal government issued in 2020. The transport division as a substitute glided by Part 67 of the MV Act, the court docket mentioned, whereas permitting petitioners to gather a comfort charge of 10% of the bottom fare until additional orders.

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