Having a difficult time getting an app-based cab in Delhi right now? Uber wants you to know that it's not their fault, it's the Delhi government's. The international taxi aggregating service sent a text message to its customers in the capital explaining that longer wait times are because of "suspension of surge" – a reference to the practice of increasing cab fares based on demand.
Uber along with its main app-based cab aggregating competitor Ola, decided on Monday to suspend surge pricing for the duration of Delhi's Odd-Even scheme. Ola claimed it was doing so to "support the government's initiative", while Uber took a more combative tone, saying it was suspending surge "given the threat of the Delhi government to cancel permits and impound vehicles of our driver partners".
The decisions came after Delhi Chief Minister Arvind Kejriwal had promised strict action against any taxis that charge rates higher than those set by the authorities.
Even though Kejriwal didn't specifically prohibit tge practice of surge pricing – he only tweeted about cracking down on those charging more than government-prescribed rates – the chief minister nevertheless took credit for Ola and Uber's decisions to suspend surge.
Uber has not taken this move quietly though. The text message blaming longer wait times on the surge pricing suspension is only the latest in a number of efforts from the company seeking to convince people that surge is actually better for them.
This has been a part of the company's efforts worldwide to explain why it uses this dynamic pricing model, which jacks up prices whenever demand is high. Uber claims that the surge prices encourage drivers to flock to that area, ensuring customers always have access to cabs. This has often led to bad publicity, with prices going up massively during natural disasters or incidents like the Sydney hostage crisis, making it seem as if the company resorts to price gouging.
Uber has nevertheless remained steadfast, insisting that surge pricing is the most efficient way to ensure availability, a position that has forced its competitors into doing the same. It's statement after suspending surge pricing tried to argue as much.
"Not surging is saying we should be just like a taxi and be unreliable when people need us most. These are outcomes that take choices away from the consumer and make it harder to get around cities - these are outcomes that we put a lot of hard work in to avoid so that at least you have the choice if you want one."— Uber statement.
This frequently leads to accusations of exploitation, which is what led Kejriwal into threatening the cab companies to fall in line, at a time when the success of the chief minister's flagship odd-even scheme remains up in the air.
This has in turn led to plenty of criticism as well, from those who have argued that the government allows other forms of public transport – particularly autos and black-and-yellow taxis – to fleece customers by going off meter.
Many argue that Uber's stunning growth worldwide and the convenience it and other app-based services now offer compared to existing taxi options, can be credited to the fact that it wasn't hemmed in by strict regulations.
Much of the problem stems from the lack of clear regulations governing app-based cab services, a situation that mostly worked in their favour, but has now led to an uncertain regulatory environment. This even caused Ola and Uber to be banned in the capital for some time, before rules were framed requiring them to conform to environmental and safety rules, among others.
The union government in October 2015 layed out guidelines for ride-hailing apps like Ola and Uber, calling them "on-demand information technology-based transportation aggregators," and leaving them exempt from rules that currently govern taxis.
But those guidelines were not binding on states, allowing Karnataka, for example, to frame rules this week that set ceiling on the fares that cabs can charge. These effectively permit surge pricing, but only up till a certain level.
Delhi is apparently falling back on its existing taxi fare rates while cracking down on Ola and Uber, despite the fact that few taxis or autos in the capital actually go by the meter. Medianama also reports on a Delhi government notification that seems to suggest a reduction in taxi and auto rickshaw fares due for June.
Until the Delhi government clarifies its approach to the app-based taxi companies, however, it seems like threatening tweets from the chief minister and passive-aggressive responses from private enterprise will continue to be the order of the day.