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Ola gets license to operate in Karnataka but problems remain

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The long-drawn struggle between Ola and the Karnataka state transport department appears to be finally over.

The Economic Times reports that the Karnataka state government has given Ola the license to operate in the state after the cab aggregator was able to meet the conditions of the new guidelines for cab aggregators. This makes Ola the first cab aggregator to operate legally in the state. When contacted by MediaNama, Ola refused to comment.

The company was able to obtain the license after registering and providing the necessary information of 100 vehicles to the transport department. Ola will have to abide by the new guidelines for its entire fleet. Transport commissioner Rame Gowda told ET: “Ola will have to follow the rules for the rest of its fleet as well. They have to install GPS, digital meter in the rest of their cars, only then will they get a licence.”

That will be a daunting task. Karnataka’s transport department issued the preliminary guidelines for cab aggregators in February— and they were “brutal.” Here is a sampling of the conditions:

– The applicant should have a minimum of either 100 taxis owned or in agreement with individual taxi permit holders.
– The applicant has to have a control room facility. (no further details)
– The vehicle should have a display board inside the taxi with the driver’s info.
– The vehicle should also be fitted with a ‘tamper proof electronic digital fare meter’ which is capable of generating a printed receipt to be given to passengers if fare cannot be informed through SMS or email.
– It should have a yellow coloured display board with the word “Taxi” visible from both the front and the rear and can be illuminated at night.
– Driver should be a resident of Karnataka for a minimum of 5 years.
– He should have a working knowledge of Kannada and any other language, preferably English.

The final guidelines, which came out in April, isn’t that different either.

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A total of six companies had applied to the state government for licenses. These are: Uber, TaxiForSure, Ridz, Welink and Shreyas. According to ET, Uber doesn’t have a licenses yet as it still hasn’t provided the transport department with all necessary documents.

Additionally, Ola has also applied for a license in Delhi and is expected to get the licenses in a week’s time, ET reports.

Ola’s other problems

Securing licenses from state governments to operate legally is not Ola’s only headache. Earlier this week in Chennai, 250 people, who have signed up with Ola, protested outside the company’s office demanding the scrapping of surge pricing, customer ratings, Ola Share and Ola Micro.

The other problem, that applies to almost every Internet business, is the constant tussle between and offline and online services. This Tuesday, yellow taxi cabs in Mumbai went on a strike protesting against the low fares charged by the online cab aggregators, who are flushed with VC money.

Past problems of cab aggregators

Earlier in May, the Karnataka transport department had ordered Uber and Ola to suspend operations in the state since they didn’t have the licenses to run cab services. And they even impounded 60 cabs from Ola and Uber in and around the Bangalore airport that same month.

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Thats’ not all. In April, the Karnataka government seized least 30 vehicles from online cab aggregators Ola and Uber for charging their users over the government-decided rate of Rs 19.5/km. In fact, cab aggregators may have to set an upper limit for surge pricing. The government has advised the states to cap taxi fares, according to the Economic Times. Reports added that overall 3,000 Ola cabs were impounded as part of the enforcement drive over the last two months by the Karnataka Transport Department. The government impounded cabs for a period of one or two weeks and imposed hefty fines on cab drivers.

Related:

Why Karnataka’s cab aggregator rules are good, bad and ambiguous

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