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Maharashtra proposes to bring online cab aggregators under Motor Vehicles Act


The Maharashtra state government has proposed that online cab aggregators, such as Uber, Ola and TaxiForSure, be brought under the ambit of the Motor Vehicles Act. The move could potentially impact the businesses of the companies operating in the state.Read the entire proposed regulations here.

The Home department of the state is considering amending the Maharashtra Motor Vehicles Rules, 1989 and adding a sub clause to include web/mobile-based aggregators:

“Aggregator” means a taxi service provider or an operator who acts as a digital intermediary for a passenger to connect with a driver, by means of a mobile phone/web application or through a call centre or by any other advance technology, of a public service vehicle having a valid permit granted under section 74 of Motor Vehicles Act, 1988 or Rules made thereunder by the Central or State Government.”

The state government also adds that no person can function as an aggregator unless registered with Transport Department. “The State Government may, by notification in official gazette specify conditions for such registration,” it added.

The Home Department also added that a new scheme known as the “City Taxi Scheme 2015” for licencing of taxi service providers including aggregator of taxis. Accordingly, the Fleet Taxi Service Scheme 2006, Phone/Fleet Taxi Scheme 2010 and Call Taxi Scheme 2010 shall be merged with this scheme. The scheme will be applicable to Mumbai Metropolitan Region and may be extended in rest of Maharashtra.

Some of the operational infrastructure proposed under the scheme could restrict the businesses of taxi aggregators:

– The licensee shall maintain a fleet of minimum 1000 and maximum 4000 taxis either owned or through an agreement with individual taxi permit holders. However, maximum 2500 permits will be issued to a licensee in first phase.

– The licensee shall maintain a web portal containing all details of its ownership, registered address, services offered, fare structure, insurance liabilities, control room number, name and contact details of a duly appointed grievance redressal officer.

– The Taxi should be driven on clean fuel i.e. Petrol andCNG/LPG/Hybrid/Electrical. Note that some taxis run on diesel and recently, the Delhi government rejected Ola’s plea against the Diesel taxi ban.

– Taxi shall be fitted with GPS and GPRS based tracking device, printer, and a display panel showing the path traversed and total distance covered. The device shall be in constant communication with the control room of the licensee while the taxi is on hire. In case of closure of the said GPS, the reason is to be recorded by the licensee along with the duration of such closure.

– Taxi should be replaced by a new vehicle on completion of 20 years or as may be decided by State Transport Authority from time to time.

– Working hours of drivers is to be limited in accordance to the Motor Transport Workers Act, 1961. According to the Act, drivers working hours will be limited to eight hours a day and not more than 48 hours hours in a week. However, this will be exempt for long distance rides and in that case it shall be no more than 10 hours and 54 hours in a week. 

– The driver shall have a valid commercial driving license to drive a Taxi and a valid Public Service Vehicle Badge issued by the Transport Department.  The driver on duty shall be in uniform as approved by the department or as per company’s design.

–  Any person who has been convicted within the past seven years of driving under the influence of drug or alcohol, also has been convicted at any time for any cognizable offence under the Criminal Code of Procedure 1973 including fraud, sexual offences, use of a motor vehicle to commit a cognizable offence, a crime involving property dispute and/or theft, acts of violence or acts of terror must not be engaged by the licensee.

Grant, duration and renewal of licenses

–  The application for license shall be submitted to Secretary, Mumbai Metropolitan Regional Transport Authority and accompanied by a processing fee of Rs.1,00,000.

–  A fee Rs. 25,000  will be levied for each permit granted under section 74 of Motor Vehicle Act 1988.

– After scrutiny of application and upon being found eligible, license will be granted for a period of five years upon furnishing a bank guarantee of Rs. Fifty lakhs.

Suspension and cancellation of license

A license to an operator can be cancelled if:

– The licensee has failed to comply with any of the terms and conditions as detailed by the “City Taxi Scheme”

– The licensee has failed to maintain the taxi in compliance with the provisions of the Motor Vehicles Act and or rules framed;

– An employee of licensee is guilty of any misbehaviour or misconduct with any customer;

– A complaint against the licensee by any customer has been proved beyond reasonable doubt, the licensing Authority may suspend the license for a specified period or cancel the license.

MediaNama’s take

We had highlighted that the fight between online cab aggregators and offline players will only intensify. Some of the rules prescribed by the state government seem to be in favour of providing parity to offline players. But it needs to be pointed out that some of the operational rules could hamper how companies such as Uber and Ola could function.

For example, the rules entail that they need to keep a minimum fleet of 1000 cabs and a maximum of 4000 cabs. At the same time, they say that they will only allow 2,500 individual permits for drivers. So effectively, an aggregator like Uber can maintain a fleet of 2,500 cabs since they do not own any of their taxis.

It also remains to be seen if the companies will bear the cost of Rs 25,000 for the individual permit.

The rules for suspension and cancellation of license also places enormous pressure on aggregators to ensure that the drivers be polite and ensure that there are no misdemeanors against passengers. Merely suspending erring drivers will not be enough anymore.

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