· In November 2022, the Karnataka transport department capped the service charge levied by ride-hailing companies like Uber, Ola, and Rapido on app-based auto rickshaw rides at 5% (with applicable GST on the base fare).

· This move aimed to make auto rickshaw rides more affordable for daily commuters in Bengaluru.

Challenge by Ride-hailing Companies:

· Uber, Ola, and Rapido disagreed with the cap.

· They argued that the central government's motor vehicle aggregator guidelines allowed them to charge a 20% commission along with a surge pricing mechanism (up to double the base fare).

· These companies challenged the state government's notification in the Karnataka High Court.

Court's Decisions:

· January 2023: The High Court issued a temporary stay order, allowing these companies to continue operating with a 10% convenience fee while the case progressed.

· May 2024: The High Court delivered its final verdict, dismissing the writ petitions filed by the ride-hailing companies.

· The court upheld the state government's notification, meaning the 5% service charge cap remains in effect.

Impact:

· This ruling is expected to benefit auto rickshaw riders in Karnataka, particularly in Bengaluru, by potentially leading to lower fares.

· Ride-hailing companies will have to adjust their pricing models to comply with the 5% service charge cap.

Additional Notes:

· The judgment highlights the ongoing debate between ride-hailing companies and state governments regarding fare regulations and service charges.

· It remains to be seen how this specific ruling will influence similar regulations in other parts of India.