Uber Technologies Inc. and its competitor in India, Ola, have had cars seized this week in the country’s technology capital of Bangalore for allegedly overcharging customers, a city transport official said.
More than 30 Uber and Ola vehicles have been impounded, said Rame Gowda, the Bangalore-based commissioner of transport and road safety. He said operations against the two companies are continuing.
San Francisco-based Uber and its Bangalore-based rival Ola square off for an increasing number of customers in India who use the taxi-hailing services. The government of the southern state of Karnataka, of which Bangalore is the capital, banned “surge pricing” on April 6, and set a per-kilometer price ceiling for air-conditioned and non air-conditioned cabs, while customers across India complained in petitions and on social media against the higher fares.
“Surge pricing is not in the rules,” Gowda said. “You have to follow the rules of the land, you cannot violate the rules of the land and harass the public.”
Commuters are encouraged to file police complaints against Uber and Ola if they are subject to overcharging, he said.
Uber this week sent out personalized e-mails to its base of users in Bangalore, saying that its pricing ensures reliability and availability for those who agree “to pay a bit more” on occasions such as weekends and holidays.
“It’s a bit of economics 101: supply and demand adjust in response to price changes,” Uber said in the e-mail. Airlines and hotels follow the same practice, it said.
Neither Uber nor Ola responded to e-mails requesting comment on the seizure of their vehicles.
In February, Nitish Parnami, an Uber customer in New Delhi, started a campaign on online platform Change.org urging Amit Jain, Uber’s head of operations in India, and Travis Kalanick, the chief executive officer, to regulate pricing. The petition has received more than 37,000 signatures.
Uber responded online to the petition saying, “higher prices are required in order to get cars on the road and keep them on the road during the busiest times.”
©2016 Bloomberg L.P.
This article was written by Saritha Rai from Bloomberg and was legally licensed through the NewsCred publisher network.