The Karnataka transport department has issued an order allowing all app-based auto aggregators such as Ola, Uber and Rapido to collect 5 per cent of service charges on government-capped auto fares. An additional 5 per cent fare will be applicable as GST.

The order, which was issued on Friday by the transport department, briefly read, “All the Transport Authorities in the State of Karnataka are hereby directed to fix the final fare inclusive of 5% service charge, and applicable GST tax.”

In October, the Karnataka transport department ordered app aggregators like Ola, Uber and Rapido in Bengaluru to stop auto services and declared them illegal, after they received multiple complaints of passengers being exorbitantly charged.

The Karnataka high court later allowed the app aggregators to run their auto services with an additional 10 per cent fare to the government fixed prices, excluding the GST. The court then ordered the transport department to frame the new auto fares for app-based aggregators.

In November, global cab aggregator Uber had announced its plan to restrict auto services in a few parts of Bengaluru. In a statement on its website, Uber then expressed concerns over the 10 per cent commission cap rule by the Karnataka government. “The 10% service charge cap by the Karnataka transport department is not financially sustainable. 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,” Uber wrote.

In November 2021, the Karnataka government had raised the meter fares of auto drivers in the state. The price was increased to ₹30 from ₹25 for the first two kilometres and the base price per every kilometre was increased to ₹15 from ₹13. The current fixed service charge will be applicable to these auto fares.