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Govt softens stance on cab-hailing apps; will not ban Uber and Ola

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The Indian government has ruled out banning cab-hailing apps like Uber and Ola, but will be imposing conditions to make their operations safer, reports ET. The transport ministry is also likely to issue an advisory within the next three weeks to all state governments to regulate these services under the Motor Vehicles Act.

According to the Ministry, the Government wants to promote IT based taxi companies and not ban them. Government officials mentioned that the apps come within the purview of the Motor Vehicles Act as they are used to solicit services for transport, rejecting the idea that these services should be governed by the IT Act.

Note that services like Uber and Ola do not operate taxi services and only act as aggregators, something we had pointed out in December. However the ministry’s current draft also includes the term ‘aggregators’ in order to bring these IT enabled services under the legal framework of the new road safety bill. The pan India bill is expected to be finalized in the next 3 weeks, although it will not be legally binding. The Centre will urge the state governments to accept the guidelines and provide them with a list of dos and don’ts to provide a level playing field, although if to implement this or not will lie up to the state governments.

Meanwhile an advisory is being issued as an interim measure till the new Motor Vehicles act is finalized. The transport ministry has also suggested amendments to the Road Transport and Safety Bill to act against such service providers in case of wrongdoings.

Timeline of Government vs Cab aggregators:

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– On December 8th, the Delhi Government was considering cancelling the permission of Uber and scrutinizing the permits of all private taxi services in December, following various security concerns raised against the online cab booking service following an alleged rape of a 27-year old woman by one of the Uber drivers who was part of the company’s recently launched low-cost India-only service UberGO.

– Subsequently, Sathish Mathur, the special commissioner at Delhi Transport Department said that Uber’s services had been blacklisted, since it was “misleading consumers” by plying taxis with All India permits which is not allowed while offering point-to-point travel services in Delhi. Mathur also mentioned that they will be issuing a public notice that Uber is not authorized to provide radio cab service in the capital and will be looking into other players like Ola and TaxiForSure as well.

– The next day on the 9th, the Delhi government transport department 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 would be allowed to provide services in Delhi, until they got a license from the department.

– The same day the Ministry of Home Affairs advised all state governments & union territories to ensure that operations of online taxi services like Uber, Olacabs and TaxiForSure among others be stopped until they registered themselves with state administrations. We had mentioned then that, since transport is a state subject under the Indian constitution, all state governments don’t necessarily have to follow the Ministry’s advice.

– Following this advisory, the Government of Karnataka banned Uber, TaxiForSure, Carzonrent and Zoomcar from operating in the state. Some taxi operators that were allowed to continue operations in the state included Meru Cabs, EasyCab, Bangalore Cabs, Megha, Spot City, Rapid and KSTDC.

– In January, the Delhi Transport Department brought online cab aggregators like Uber, Ola and TaxiForSure under Radio taxi license by amending its Radio taxi regulations. The department said that these services will continue to remain banned until they comply with these new norms and opt for a radio taxi license, which would be provided for five years. Companies can apply for these licenses along with a license fee of Rs 25,000 and provide a bank guarantee of Rs 15 lakh upon receiving the license.

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– The same month Uber resumed operations in Delhi, after applying for a radio taxi license. TaxiForSure had also applied for a radio taxi license earlier the same month, while Ola was also considering a similar move. The Delhi Transport Department subsequently found certain deficiencies in the license applications of Uber, Ola, TaxiForSure and NTL Call Cabs, and rejected their applications in the current form.

– In February, Uber had been given seven days to complete their radio taxi license application as per the new regulations by the Delhi Government or face rejection. Later in the month, Uber had confirmed to Medianama that they had submitted all required details and documents. However, the Delhi government was reportedly contemplating blocking the IP address of Uber and shutting down its operations in the country if it did not get a radio taxi licence to provide services.

Image source: Flickr user Nicolas Mirguet

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