Uber, the leading cab aggregator suspended surge pricing in New Delhi. Surge pricing is a common strategy followed to charge commuter above official rate.

CM Arvind Kejriwal tweeted that action will be taken against taxis who are charging above government prescribed rate. Applicable to private transport as well, Uber has taken a step to suspend surge pricing in New Delhi only. No information is available on whether the same thing is applicable in other states also. Surge pricing cause commuters to pay higher than what is officially fixed. A revenue tactic used by cab aggregators to charge more incase availability of cab is limited.

Strict action, incl permit cancellation n impounding vehicle, to be taken against taxis which charge rates more than govt prescribed rates

— Arvind Kejriwal (@ArvindKejriwal) April 18, 2016

A good step in support of people, has received a mix matched feedback. Delhi Government has issued a warning to charge applicable fare only. Cab aggregators like Uber and Ola hike the price much higher during peak time, forcing commuter to pay more.  Compared to the fare charged by regular taxi, private aggregators charge above 25%.

Official fair of regular taxi in New Delhi is around Rs.12.50/km for Economy Radio Taxi and Rs.14 for Non-AC and Rs.16 for black/yellow cabs. Via surge pricing private taxi provides are charging much higher than what is prescribed by the government. After issuing the warning, Uber has suspended the practice of surge pricing that plays a vital role in providing good commission to the drivers.

 Takeaways:

• Uber suspended surge pricing policy in New Delhi after strict warning by the CM Arvind Kejriwal
• Commuters pay more than 25% of what prescribed rate by the government.