Ola, Uber launch subscription-based plans for auto drivers

Ola and Uber could bypass the 5% GST applicable on auto-rickshaw rides facilitated by them.

Ride-hailing platforms, Ola and Uber, have rolled out subscription-based plans for auto-rickshaw drivers.

According to a media report, Ola has launched the subscription-based model in Delhi-NCR, Mumbai, Bangalore and Hyderabad, while Uber has rolled out its subscription plans in 6 cities, including Chennai, Kochi and Visakhapatnam.

So, how do these subscription-based plans work? It is said that the platforms charge a fixed daily or weekly fee for an unlimited number of rides, instead of charging a booking fee or commission on every transaction. Under the new model, the ride-hailing platforms do not allow online payments and they don’t set the prices for the rides.

Reports also suggest that this could help Ola and Uber to bypass the 5% GST applicable on auto-rickshaw rides facilitated by them. The GST is applicable under Section 9 (5) of the Central GST Act, which mandates e-commerce companies such as Uber and Ola to collect and pay tax on behalf of the service providers listed on their apps.

Source: ET