Now auto rickshaw drivers providing taxi services through Ola and Uber will now get full payment for every ride. For this, both the cab service providing companies have rolled out subscription based plans.
Auto drivers will benefit from this plan because they will no longer have to pay commission to the companies after the ride. Namma Yatri and Rapido have already started this type of service.
Ola has launched this model in some big cities including Delhi-NCR, Mumbai, Bengaluru and Hyderabad. At the same time, this service of Uber will be available in 6 cities including Chennai, Kochi and Visakhapatnam.
Under this new plan, now both the auto service aggregators will charge a fixed fee per day or week from the auto driver instead of charging commission on every ride. With this, the driver will not have to pay any other charge apart from the platform fee. In this, the fare of the auto booked by the customer will go directly into the driver's pocket. However, the fees of the subscription plan have not been mentioned.
According to reports, drivers providing service from Rapido are paying between Rs 9 and Rs 29 as daily fees, while Namma passengers are offering their service at Rs 25 per day or Rs 3.5/ride for up to ten rides, after which it is free.
Ola and Uber are providing services on commission-based model in many cities. In this, the platform takes a part of the fare for every ride as commission or booking fee and the rest goes into the driver's pocket. In this, the platform itself provides the facility of riding price and online payment.
Ola and Uber do not allow online payments in subscription plans and they also do not fix the price for rides. One disadvantage of this could be that drivers can charge arbitrary fare for the ride.
With this decision, Ola and Uber can get benefit in 5% GST on services. However, according to tax experts, this model may lead to disputes between app operators and tax authorities.
Because, in September 2023, the Advanced Tax Ruling had told Namma Yatri that there is no need to collect and pay GST. But, there is a lack of clarity on whether this will be applicable on other platforms or not.
Under Section 9(5) of the Central GST Act, e-commerce operators such as ride-hailing platforms, food-delivery companies, online retail market service providers are required to collect and pay tax in the form of 5% GST tax. . They also include drivers, restaurants and e-market place sellers listed on their apps.