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Odd-even effect: Uber, Ola suspend 'surge pricing' after govt sends notice

Commuters can now reserve taxi rides through mobile apps without worrying about paying more than the normal fares.

App-based cab hiring services Uber and Ola on Monday settled to suspend 'surge pricing' after a notice by the Delhi government, reacting to grievances of overcharging from travelers.

On the first full working day of AAP government's odd-even plan, Delhi CM Arvind Kejriwal issued a warning to app-based companies to comply by the government approved rates.

A little later, both Uber and Ola announced an end to surge pricing, a mechanism wherein rates rise in proportion to demand.

The increased demand by office-goers and parents to ferry kids from school resulted in prices going up by as much as five times. Despite the swell, demand remained high and many travelers complained of being abandoned by their drivers, or having to wait 15 minutes or more for their ride.

Some commuters had even launched online petitions against surge pricing. One such petition received 56,505 signatures by Monday evening.

The surge pricing tool took a toll by afternoon, when Kejriwal tweeted, "Strict action, including permit cancellation and impounding vehicle, to be taken against taxis which charge rates more than govt prescribed rates."

Later, a notice was issued by the transport department to the app-based taxi services, mentioning various taxi schemes and the fares that could be charged by them, including radio taxi scheme fares, which are Rs 23 per km.