Love-Hate Relationship with Surge Pricing
By Advocate Aditya Parolia / 2016-12-29
A surcharge is a fee or other charge that is added to the cost of a good or service. It may be a temporary measure to defray the cost of increased commodity pricing, such as with a fuel surcharge, or it may be permanent.

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If you get a ride from Uber or Ola on a Diwali Night or on New Year’s Eve, you’re certainly going to pay more than the normal rates.  Ola and Uber have been known to charge  3 times the usual fare during peak hours during the day and 4 times the usual fare during the period of 12 AM to 5 AM as per the guidelines are given by Ministry of Road, Transport and Highways.

Surge Pricing

Uber describes surge pricing in a very simple way on its website. "Uber rates increase to ensure reliability when demand cannot be met by the number of drivers on the road," explains the company on its official website.

Uber claims that this is done so in order to encourage more drivers to come out when it can't meet demand so that the service is consistent and reliable. Uber is very careful about this and has bold notifications on the screen of your phone whenever it is charging surge prices.

Ola also follows a similar model. According to an Economic Times report, there is also additional one-time fee during rush hours. "Users booking during peak hours are charged a flat Rs 50 over and above actual fares," the report notes.

A surcharge is a fee or other charge that is added to the cost of a good or service. It may be a temporary measure to defray the cost of increased commodity pricing, such as with a fuel surcharge, or it may be permanent.

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Get connected to the Best Lawyers and Chartered Accountants Near You!


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