Uber India may reduce the availability of its auto service in some parts of Bengaluru.
An Uber spokesperson said in a blogpost the auto service may become unfeasible due to the Karnataka High Court's provisional orders to restrict the commission charged by the aggregator at 10%.
“If our costs cannot be covered through commissions, we will have to find ways to offload costs that could impact the experience of drivers and riders…We may have to make the difficult decision to limit Uber Auto to select parts of Bengaluru where the service is viable,” Nitish Bhushan, Head of Central Operations, Uber India & South Asia said in the blog post.
Uber also claimed that since the commissions were cut, there has been an increase in cancellations.
The commission that the court restricted from the aggregator includes the amount levied from drivers to compensate them for the app's convenience in finding passengers along with the convenience fee that the passengers pay for doorstep pickup.
“Since removing the doorstep compensation, cancellations have increased by over 50 percent in the city, as availability reduces and drivers turn down trips that are not economically viable for them,” he added.
The development came after Karnataka High Court on October 14 had directed the government not to take any coercive action and permitted the companies to collect 10% of the basic fare as a convenience fee along with 5% of GST as a temporary norm before the officials come up with a plan.
The court had also granted the state government, regulators, and cab companies 15 days to come up with a reasonable pricing system.
Last week, the Karnataka Transport Department and representatives of Rapido, Uber and Ola met to discuss the issue where the companies argued for maintaining the convenience fee at 25% of the basic cost and the Karnataka Transport Department insisted on maintaining the temporary rate of 10% set by the court.
Meanwhile, the Bengaluru Auto Rickshaw Drivers Union (ARDU) developed its own transportation app to compete with Ola, Uber, and Rapido.
