Imperative For Affordable Cabs Over Surge Pricing

Abhijeet Singh
20 Mar 2024
12:55 PM
2 Min Read

As cities pulsate with the rhythm of daily commutes, the need for an equitable and accessible transport system has never been more critical.

Vyshak Simha CEO of viaDOTS mobility outlook

In the dynamic urban transportation landscape, the conversation with Vyshak Simha, CEO of viaDOTS, a ride-hailing SaaS platform, sheds light on a pressing issue: prioritising affordable cabs over the contentious surge pricing model.

Surge Pricing Dilemma

Surge pricing, a model that adjusts fares in real-time based on demand, has been a polarising topic. Ostensibly designed to balance supply and demand, it often results in exorbitant fares during peak hours, leaving riders grappling with unpredictability and inflated costs. While ensuring driver availability, this mechanism inadvertently exacerbates socio-economic disparities and detracts from the sustainability goals of urban mobility.

Indian Ride-Hailing Landscape

India's burgeoning app-based ride-hailing sector, valued at INR 30.72 billion in FY20, is on a trajectory to hit INR 55.15 billion by FY25. Despite the industry's exponential growth and its convenience, the shadow of surge pricing looms large, affecting consumer trust and the appeal of ride-hailing services.

Consumer Sentiments, Regulatory Concerns

Surveys reveal a growing discontent among consumers, with many feeling the pinch of inflated fares during high-demand periods. The Competition Commission of India's findings and the Ministry of Road Transport and Highways' concerns echo this sentiment, highlighting the need for transparency and regulation to prevent consumer exploitation and ensure fairness in pricing.

Impact On Drivers, Service Availability

Surge pricing not only affects riders but also influences driver behaviour, skewing the availability of cabs towards peak hours and creating service gaps during off-peak times. This model, while seemingly lucrative, may not significantly enhance drivers' earnings when factoring in operational costs and time lost in traffic.

Path To Affordable, Sustainable Urban Mobility

The dialogue with Vyshak Simha underscores the imperative to re-envision ride-hailing economics. The industry must innovate to optimise operations, reducing the reliance on surge pricing. By fostering a model that values affordability and transparency, ride-hailing services can contribute to a more inclusive and sustainable urban transport ecosystem.

Striking Balance

While acknowledging the rationale behind surge pricing, it's crucial to find a middle ground that safeguards consumer interests without compromising service reliability. Developing a transparent pricing policy and capping surge rates can mitigate the impact on riders while ensuring a steady income stream for drivers.

Broader Narrative

The discourse extends beyond pricing strategies to encompass the broader goals of urban mobility: accessibility, sustainability, and equity. By reorienting priorities towards affordability and inclusivity, ride-hailing platforms can play a pivotal role in shaping a transport system that caters to all city dwellers, regardless of their economic background.

As urban centres continue to evolve, the quest for a balanced, fair, and sustainable transportation model remains paramount. In the end, the measure of a city's transport success isn't just in its efficiency or technological prowess but in its ability to provide affordable, reliable, and equitable mobility solutions for all its residents.

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