Knee-jerk.

The Delhi government transport department has announced that apart from licensed radio taxi services, that includes Easy Cabs, Mega Cab, Meru Cab, Chanson Cab, Yo Cab and Air Cab, no other taxi service providers are allowed to provide services in Delhi, until they get a license from the department. “All other transport/taxi service providers through web based technology, who are not recognized, are prohibited from providing such services in the NCT of Delhi to public till they get license/permission from the Transport Department.”

A copy of the public notice is below:

 

Delhi-taxi-ban

A PTI report suggested that the centre was looking to extend this ban across India, however a TOI report said that a ban in other cities was unlikely.

Interestingly, another TOI report mentions that the Karnataka government was looking to book around 450 cabs, most of which was affiliated to Uber, for operating intra-city routes with an all-India permit back in July this year. However, the Karnataka high court had stayed this move back then.

What this ban does

Reduce competition, and options for consumers. This notice appears to go against a key feature of the Internet: that of aggregation. Aggregators and marketplaces are mere intermediaries. Just as Snapdeal and Flipkart aggregate sellers for buyers and Google aggregates sellers for advertisers, these taxi booking apps aggregate taxis for consumers. They make it easier for buyers and sellers to discover each other, facilitate a transaction, but hold no liability because they’re mere intermediaries and marketplaces.

It might also go against section 79 of the IT Act (2008), wherein, intermediaries, are defined as

any person who on behalf of another person receives, stores or transmits that record or provides any service with respect to that record and includes telecom service providers, network service providers, internet service providers, webhosting service providers, search engines, online payment sites, online-auction sites, online-market places and cyber cafes;’.

Section 79 holds that the intermediary will not be liable “for any third party information, data, or communication link made available or hosted by him, if the intermediary does not initiate the transmission, select the recipient or select or modify the information. The Intermediary is also liable if it doesn’t do due diligence, or address complaints within 36 hours. The due diligence requirements are outlined here, and they’re mostly about publishing terms and conditions and a privacy policy.

Why this is important

This is a provision which the Internet industry fought hard for, after Avnish Bajaj was arrested when a pornographic CD was sold on what was then Baazee.com (now ebay.in). The idea was that as a marketplace, Baazee was not in control of what sellers were selling on the platform, and liability should be limited: the owner of a market cannot be held responsible for what a shop sells.

Importantly, one could argue that since some taxi apps, including Ola and Uber, do not disclose details of sellers (cabs) to buyers before a purchase, and hence aren’t effectively marketplaces: a buyer doesn’t know what is being bought, and isn’t making that decision, given that no information is being provided prior to the purchase, apart from a fare. In these cases, there may be liability.

Uber Timeline until now

Uber driver rapes a woman: A 27 year old woman was raped by one of the Uber drivers who was part of the company’s recently launched low-cost India-only service UberGO on Saturday night.

Delhi Police investigates and flags several security issues with Uber: Following the investigation, Delhi Police raised several security concerns against Uber including no driver verification & background checks, no live GPS tracking system independent of the phone and no driver license among others.

DCP (north) Madhur Verma mentions that the driver was also a repeat offender and had faced rape charges in 2011, something which Uber didn’t check while hiring him.

Uber Statement : Uber says that it has provided the local authorities with all relevant details that includes driver details (name, age, photo, complete driver’s license details, bank verified address) vehicle details, (license, registration, insurance, state-issued driver permit) and trip details (trip data, route, pick-up & drop-off location). It also mentions that it exclusively partners with registered for-hire drivers who have undergone the commercial licensing process, hold government issued IDs, state-issued permits, and carry full commercial insurance.

Delhi Govt consider cancelling Uber’s permit : Delhi government considers cancelling the permission of Uber and scrutinise the permits of all private taxi services. It also sends a notice to Uber under the section 161 of CrPC and is considering legal action against the company for failing to run background checks on drivers before onboarding them.

Delhi Govt bans Uber : Delhi Government bans Uber’s services in the city saying that it is “misleading consumers” by plying taxis with All India permits which is not allowed while offering point-to-point travel services in the city.

Mathur said that cabs plying customers point-to-point in Delhi, have to follow the Radio Taxi Scheme that includes guidelines like having taxi parking space & office space for call centers among others. However we believe these radio taxi guidelines doesn’t apply to platforms like Uber, since it is essentially a tech platform that allows drivers to list their cars and consumers to hire these taxis. It doesn’t own these taxis or employ drivers on its own.

Delhi Govt bans all unlicensed taxi services, including Ola, TaxiForSure : The Delhi transport department announces a list of licensed six radio taxi services and says no other taxi service providers are allowed to provide services in Delhi, until they get a license from the department.

A PTI report suggests that the centre is looking to extend this ban across India, although a TOI report says that a ban in other cities is unlikely.

FIRs filed against Uber : Verma says that they have filed an FIR against Uber for negligent conduct. He adds that a separate FIR is filed against Uber under Section 420 (cheating) of IPC and are also considering Section 188 of the MV Act. Verma says that Uber had cheated consumers by claiming to provide safe taxi rides with verified drivers.

Karnataka Govt was looking to ban Uber in July this year : Karnataka government was looking to book around 450 cabs, most of which was affiliated to Uber, for operating intra-city routes with an all-India permit back in July this year. However, the Karnataka high court had stayed this move back then, as indicated by a TOI report .

Meanwhile, Mumbai Police has also asked crime branch to collect and verify details of cab service providers and drivers contracted by them.

Updates: Added Uber Timeline.

(Vikas SN contributed to this article)