Ola and Uber to face class action suit against surge pricing

Its trouble time once again for cab aggregators in the country as two non-governmental organizations (NGOs) and two individuals have filed a class action suit against Ola and Uber and are seeking damages worth more than Rs 9,000 crore for imposing surge pricing across the country.

The two NGOs namely Nyaybhoomi and Pariwar Unity Road Safety Life Safety, who have approached the National Consumer Disputes Redressal Forum (NCDRC) with a case against Uber and Ola are basically asking for refund to and on behalf of all passengers across the country of an estimated sum of Rs.9,239 crore being the excess amount collected by the Ola and Uber in the past three years.

Notably, India now has the option of class action suits in its company laws, a provision notified earlier this year. The Consumer Protection Act permits individual consumers to file complaints on behalf of or for the benefit of others who have similar interests or are affected by the same wrong.

The forum is likely to take the case under consideration on October 5. The two companies started collecting excess fare in the form of surge pricing despite Delhi High Court having passed an order directing the companies not to charge in excess of notified fares but the practice continues till date.

The lawsuit also alleges that the companies are still overpricing and charging money towards State or Municipal Corporation Development taxes that are not even payable to the state governments.

The NGOs apparently arrived at this humongous, 9,000 crore+ figure by applying some simple mathematics to publicly available data that includes excess amount charged per vehicle per trip due to surge, average number of rides per day per vehicle with surge pricing and average fleet size in India over the 3-year period. Apparently, the NGOs have considered the past 3 years to reach the huge damages.