Karnataka government fixes 5% service fee for mobile app-based auto services

With this, the fare will come down. Currently, aggregators charge 15% as service fee, including 5% GST

The Transport Department on Friday (November 25) issued a notification fixing the service fee for auto services provided by the mobile app-based taxi aggregators such as Ola, Uber and Rapido. It says the aggregators can collect from users a service fee of 5% of the auto fare fixed by the authorities, and the applicable GST.

Officials say at present, aggregators charge 15% as service fee (including 5% GST) as per the Karnataka High Court’s direction. With the fixing of service fee, the fare will come down.

Transport Secretary N.V. Prasad said, “The service fee has been fixed as per the provisions available in the rules, and it is applicable with immediate effect. Taxi aggregators have to follow the rules on collecting the service fee from the passengers.”

In 2021, for Bengaluru city, the Regional Transport Authority had fixed a basic fare of ₹30 for the first 2 km and ₹15 thereafter for every km. 

The notification issued on Friday states that directions have been given to regional transport authorities (headed by the deputy commissioners) to consider service fee and GST while fixing the auto fares.

The Transport Department has fixed the fee after holding consultations with various stakeholders such as taxi aggregators, auto driver unions, and the general public as per the directions of the Karnataka High Court.

In the first week of October, the department had directed taxi aggregators to stop auto services after receiving complaints against them of charging exorbitant fares. Aggregators were accused of charging a base fare of ₹100 for 2 km. The aggregators had challenged the order in the Karnataka High Court. The court had allowed it to collect 15% (including 5% GST) as user fee for providing the auto services.