What is Surge Pricing ? Surge Pricing in India

Have you heard about the term “Surge pricing” ? Surge Pricing is a computer-driven, dynamic pricing system. we can easily say this is similar to pricing used by airlines. Those using the Surge Pricing system, can raises fares when demand for rides outstrips the supply of available taxis.

Earlier we have heard news that Delhi banning “surge pricing” by US-based taxi-hailing app Uber and its local rival Ola. When there is Surge Pricing,  cab fares may rise 6 to 7 times higher than the base fare at peak periods. This is disturbing and not ethical for local people. 

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According to the companies who supports Surge Pricing, the higher fares help balance demand and supply. Delhi’s chief minister Arvind Kejriwal called surge pricing “daylight robbery”. Now government is considering setting a “price band” for taxis and auto-rickshaws.

Once the Surge Pricing approved,  there will be thousands of private taxis on the streets. Mr Kejriwal’s Aam Aadmi (Common Man) party government  threatened “strict action” against Uber and Ola taxis like cancelling the permits and impounding of vehicles. 

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Uber started its India operations in 2013. They have over 200 full time employees. Company plans to invest $1 billion (Rs. 6,808 crores) in India by 2016. They also have over 250,000 driver partners in the country. Facilities of Uber available in 26 cities.

Ola is the main rival of Uber. Ola have one lakh more vehicles available via its special app. Ola vehicle range include government-licensed taxis and auto-rickshaws. The company Founded in Jan 2011 by IIT Bombay alumni Bhavish Aggarwal and Ankit Bhati. Their facilities available in 102 cities. 

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