New Delhi | Jagran Business Desk: In what could be a piece of good news for lakhs of people across the country, Ola and Uber rides are going to get cheaper as the central government has decided to cap surge pricing charged by cab aggregators at 1.5 times of the base fare.

In a statement, the Ministry of Road Transport and Highways said that it has also restricted the discount offered by cab aggregators to just 50 per cent of the base far which will likely limit the fare volatility.

"The aggregator shall be permitted to charge a fare 50 per cent lower than the base fare and a maximum surge pricing of 1.5 times the base fare," the government said.

How the decision will make your Ola, Uber rides cheaper?

The Centre's decision to cap surge pricing charged by cab aggregators will likely make Ola and Uber rides cheaper for thousands of commuters across the country. The government believes that the decision will enable and promote asset utilisation.

It also says that the move will substantiate the dynamic pricing principle which is pertinent in ensuring asset utilisation under the market forces of demand and supply.

Drivers to receive 80 per cent of the fare applicable on each ride

The change in rules will also benefit the driver of a vehicle integrated with the cab aggregator as they will now receive around 80 per cent of the fare applicable on each ride.

The new guidelines further read that in states where the city taxi fare has not been determined by the state government, "an amount of Rs 25 to Rs 30 shall be the base fare for the purpose of fare regulation".

"Similar fare fixation shall be done by the state government of other vehicles integrated by aggregators with the relevant state," the guidelines said.

Posted By: Aalok Sensharma