Karnataka govt. has no power to decide service charge, app-based transport aggregators argue in HC 

Karnataka government opposes plea by app-based transport aggregators to stay a notification limiting service charge to 5% of autorickshaw fares that it fixed

App-based transport technology aggregators on Monday contended before the High Court of Karnataka that the State government has no power under the Motor Vehicles Act to fix or limit service charge to be collected by them, for providing autorickshaw services through their platform.

However, the government defended its action of limiting the service charge to only 5% of the government-fixed autorickshaw fare to be collected by the aggregators, stating that it had power to regulate the ‘fare.’

While the aggregators have sought a stay of the notification fixing the service charges, the government opposed their plea during a hearing on the petitions filed by them questioning the legality of fixing the service charge. 

It was also argued on behalf of the aggregators that the government had, on one hand, imposed a series of conditions on the aggregators under the Karnataka On-demand Transport Technology Aggregators Rules, 2016, and, on the other hand, had also restricted service charge to 5% of the fare. This clearly demonstrated non-application of the mind by the government as even the conditions imposed under the Rules could not be complied with, the aggregators contended. 

Pointing out that the government had not come out with any notification limiting service charge for app-based aggregators, who provide bus services, airline ticketing, and food delivery services, Ola and Uber have contended that the government’s action is discriminatory and selective.

Justice C.M. Poonacha, who heard the arguments, has adjourned further hearing till December 13. Meanwhile, the court continued its earlier interim order of permitting the aggregators to collect service charge at 10% of the autorickshaw fare fixed by the government.