Karnataka High Court stays 5% commission cap for Ola, Uber and Rapido autos

In a small relief to app-based aggregators Ola, Uber and Rapido, the Karnataka High Court has stayed the 5 percent cap on service or commission charges proposed by the transport department for the aggregators' autos.

On Wednesday, Justice CM Poonacha noted that the aggregators are requesting a higher commission cap and said that the transport department should come up with a rate that considers all stakeholder (including companies) views.

The stay order was passed after hearing the pleas filed by ANI Technologies Private Limited (Ola) and Uber India Systems Private Limited, challenging the notification dated November 25, 2022 that proposed a 5 percent commission. However, the final pronouncement is set to come on January 12, according to sources.

This comes amidst the ongoing wrangling over commission charges and licences of app-based auto aggregators with Karnataka's transport department.

The commission includes a convenience fee, which is charged to the passengers for doorstep pick-up.

App-based auto aggregators have voiced concerns over lower commissions and said a commission lesser than 15-25 percent makes business unviable for them.

"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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