India will allow app-based taxi aggregators such as Uber Technologies and Ola to charge up to 20% commission on ride fares, according to guidelines issued on Friday, diluting an earlier proposal to cap fees at 10%.
Industry experts had warned that a 10% cap would hit revenue and operations of the likes of Uber, which have faced increased regulatory scrutiny in several countries. The final guidelines, which are to be considered by the State governments when issuing licences to aggregators, say drivers should receive 80% of the ride fare with the taxi companies receiving the remaining 20%.
The government guidelines also recommended that so-called surge prices at busy times can be a maximum of 1.5 times the base fare and that companies must provide insurance cover for drivers and limit them to working no more than 12 hours a day.
India accounts for an estimated 11% of Uber’s global rides annually and is SoftBank-backed Ola’s home market.
