Railways Introduces Surge Pricing

Taking a cue from app-based taxi aggregators, Indian Railways has introduced the concept of surge pricing for premium trains Rajdhani, Shatabdi and Duronto. The flexi pricing, to be charged as multiple of base fare as tickets are booked, will come into effect from September 9.
As per the railway board formula, the base fares will increase by 10% with every 10% of berths sold. The maximum fare has been capped at 1.5 times of base fare, which means half the berths would be sold at that rate. “It' a kind of an experiment for us. We'll hardly mop up Rs.500 crore more on the passenger ` segment for current year. The maximum fare would be 50% more than the base fare,“ Mohammed Jamshed, member-traffic on railway board said. Other charges including reservation charges, superfast charge, catering charges and service tax will be levied separately.
There will be no surge on the existing fares of AC first and executive classes. Also, the maximum surge for 3AC tickets is capped at 1.4 times the base fare.
“When all means of transport have this dynamism, why shouldn't railway try? And this is being done only for those categories of passengers who have paying capacity,“ Jamshed said.
The Railways could extend the scheme to other air-conditioned classed depending on the response with these premium trains. “For implementing flexi pricing on premium classes of other trains, we first have to see how flexi pricing for these three brands of trains perform,“ Jamshed said.
Railways has already tried surge pricing for special trains, run during the peak season, including festivals and summer holidays. “For these premium special trains, we have been charging almost 3.9 times on the base fare. This time the maximum fare is just 50% on the base fare. I don't think people would have any problem in paying,“ Jamshed said.

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