TIL Desk Lucknow:?A new report released by Esya Centre has warned that bringing subscription-based ride-hailing platforms under Section 9(5) of the GST regime could significantly impact driver earnings, increase passenger fares, and encourage a shift toward unregulated transport services.

Titled “Balancing Efficiency and Equity: Evidence from India’s Technology-Intermediated Transport Services under the GST Regime,” the study is based on a survey of 2,103 respondents, including 1,044 drivers and 1,059 passengers across 13 Indian cities.

According to the report, subscription-based Software-as-a-Service (SaaS) platforms operate differently from traditional commission-based aggregators. Drivers pay a fixed subscription fee to access bookings while retaining full control over fare-setting, payment collection, and earnings. The report argues that imposing GST liability on such platforms under Section 9(5) would be legally complex and difficult to implement, particularly as many drivers fall below the GST registration threshold.

The survey found that 86% of drivers use subscription-based platforms to obtain bookings, while 56% believe the model improves their overall earnings due to lower platform costs. However, more than three-fourths of drivers fear that GST-related changes would negatively affect their livelihoods, and nearly 80% expect a reduction in take-home income. Around 60% anticipate fewer bookings, while nearly 40% indicated they may shift to off-platform rides.

Passengers also expressed concerns over rising costs. Nearly 68% said they would reduce app-based cab and auto bookings if fares increased by just 5%, while half of the respondents stated they might return to traditional taxi and auto services. Safety remains a key consideration, with almost 90% highlighting the importance of app-based safety features.

Esya Centre has urged policymakers to clarify that GST provisions under Section 9(5) should apply only where platforms directly control fare collection and pricing, while ensuring that safety and compliance measures are not treated as evidence of commercial control.