The Karnataka High Court has suspended the proposed 5 percent restriction on service or commission rates for the app-based aggregators’ automobiles, providing a small respite to Ola, Uber, and Rapido.
Justice CM Poonacha stated on Wednesday that the aggregators are asking for a larger commission cap and that the transport department should develop a rate that takes into account the opinions of all stakeholders, including businesses.
After considering the arguments made by ANI Technologies Private Limited (Ola) and Uber India Systems Private Limited in opposition to the November 25, 2022 announcement that recommended a 5 percent commission, the stay decision was made. However, sources indicate that the official announcement will occur on January 12.
This takes place in the middle of ongoing disputes between the Karnataka transport department and app-based auto aggregators regarding commission fees and licences.
A convenience fee is added to the commission and is paid by the customers for doorstep pickup.
Lower commissions have raised worries from app-based auto aggregators, who claim that a commission of less than 15 to 25 percent makes their business unprofitable.
“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,” an Uber spokesperson said.
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