App-based cabs: Boon or bane?

Chennai: It was raining heavily on Wednesday night. The 24-year-old software professional Naveen Kumar wanted to reach home without getting wet and booked an app-based cab. But, he was not happy since the cab charged him an exorbitant '200 to cover a 3.6 km distance from Ekkaduthangal to Ashok Nagar.

The reason why Mr Kumar was unhappy is that he usually spends just '70 to reach home from office, but on that day he had to shell out nearly three times the original price to get home. Welcome to the world of “surge pricing” in app-based cabs, which uses algorithms to raise fares when demand for taxis is high.   

Except for the ‘surge pricing’, Mr Kumar says the app-based cabs have made his commuting from home to office and back quite hassle-free. Many people, especially women, indeed favour taking these cabs since they provide cheap, comfortable and safe ride normally.

Mr Kumar is not the only one. There are several thousand people in the city who enjoy rides in app-based cabs at normal rates. A majority of the people with whom Deccan Chronicle spoke complained that “surge pricing” was the only problem they face while using these cabs.

“How can they do this to their customers? During rains, everyone would want to get home early and without getting stuck. In fact, these cabs should ensure more number of vehicles so as to meet the demand,” Mr Kumar said.

Several cabs resorted to “surge pricing” during the recent rains that lashed Chennai after the elections, putting the customers at the receiving end since many ended up paying three to four times more than what they usually pay.
It is not just the customers who are affected by the surge pricing phenomenon, but also the drivers. Shyam Shankar, who is registered with San Francisco-based Uber taxi service, says their business gets affected whenever the surge pricing pops up since customers don’t prefer paying more.

“They either wait till the surge ends or go for other cab services. It affects not just the customers, but also the drivers,” he added.

Commuters demand that the Tamil Nadu Government bring in regulations to ensure that these cabs don’t charge exorbitant amounts from customers who hope for a comfortable ride back home from office. Governments in Karnataka and Delhi have recently came out with regulations to ensure that app-based cabs do not charge more than the maximum charges fixed by the Government.

Take the case of G Komali, a software engineer, who spent '200 for a ride from Ekkaduthangal to Butt Road at 7 am. “At a non peak hour like 7am, I was charged around '200 for a two-km ride. The surge pricing was attributed to slight showers. This is not acceptable,” he said.

However, majority of the people who use these app-based cabs like Uber and Ola are happy with their service and safety factor attached to it. “I travel from my home to office every day in a cab. I pay the minimum but I get all the comforts. It is an excellent method of commuting for women,” Sweta Shekar, who works in the service sector, said.  She also remembers the yeoman service some of the app-based cabs provided during the December 2015 floods.

V Ramarao, Member of Traffic and Transportation Forum, says transport authorities should consult the stakeholders so as to amend the new law.  “One of the main points of contention between the new-age service providers and the government has been the nature of the business. The cab-hailing service providers see themselves as a market-driven exchange where prices get decided on the basis of demand and supply,” he said.