59% users say app taxi services still unfair despite new govt rules: Survey

Business Standard

2 days ago

A whopping 59 per cent of app-based taxi users still face unfair trade practices and poor service, according to a recent survey by LocalCircles. This is despite the government introducing new rules to fix these issues.
The survey, which took responses from over 75,000 people across 325+ districts, found that the main issues users faced were ride cancellations, surge pricing, and long waiting times.
82 per cent of users said drivers cancelled their rides, up from 75 per cent in 2023
62 per cent reported surge pricing, the same as in 2023
53 per cent faced long wait times, rising from 48 per cent last year
45 per cent were charged cancellation fees, nearly double the 23 per cent in 2023
'Drivers cancelling rides, surge pricing and long waiting times are top issues app taxi users have faced in the last 12 months; 1 in 2 experienced cancellations by the driver,' said the survey.
The survey also pointed out that many users continue to face problems with drivers and vehicle condition:
* 25 per cent dealt with rude drivers, up from 8 per cent in 2023
* 31 per cent found dirty vehicles
* 6 per cent raised safety concerns, the same as last year
Why are drivers cancelling rides?
A large number — 74 per cent of users — said drivers cancelled trips after learning the destination or that payment would be digital. Although this is an improvement from 84 per cent in 2023, it remains a major concern.
'About 74 per cent app taxi users say that drivers cancel rides when they find out that the payment mode is digital, or the destination isn't convenient to them or both,' according to the survey.
Motor Vehicle Aggregator Guidelines 2025
The Ministry of Road Transport and Highways has announced the Motor Vehicle Aggregator Guidelines 2025, giving app-based taxi services like Ola, Uber, and Rapido the go-ahead to charge up to twice the base fare during peak hours, up from the earlier 1.5x limit. During off-peak hours, the fare can not drop below 50 per cent of the base rate. States have three months to roll out these changes.
The new rules also penalise unfair ride cancellations:
* If drivers cancel rides without valid reasons after accepting them, they will be fined 10 per cent of the fare, with a cap of ₹100
* Passengers cancelling without a good reason will face the same penalty
State governments will now fix base fares for different vehicle types, including bike taxis and auto-rickshaws. Aggregators must give drivers at least 80 per cent of the fare, and they must clear payments as often as agreed in their contracts.
Despite new rules, users still unhappy
Even though the new rules aim to protect consumers and give drivers a fairer share of the fare, many users remain dissatisfied. About 59 per cent of the respondents said unfair practices and poor service still continue, while only 18 per cent noticed any improvement.
However, the number of users who saw no change dropped from 70 per cent in 2023 to 59 per cent, suggesting "some progress but not enough".
A strong majority — 82 per cent — want the government to set basic common standards for all app-based taxi services and drivers. This number remains unchanged since last year.
'A total of 82 per cent of app taxi users believe the government should bring basic common standards for shared services like app taxi aggregators and their drivers,' added the survey findings.
New competitors, but challenges remain
The survey comes at a time of major change in the industry. The government plans to launch 'Sahkar Taxi', a cooperative-based service that lets drivers keep their full earnings without paying commissions to platforms. States like Karnataka, Goa, and West Bengal have also started their own taxi apps, but these haven't always lived up to expectations.
Meanwhile, new companies like Rapido have entered the four-wheeler taxi market, but users say they still face problems with pricing, reliability, and service quality.