The Karnataka High Court has upheld the state government’s rights to frame the Karnataka On-demand Transportation Technology Aggregators Rule, 2016 under the Union government’s Motor Vehicle Act, 1988, reports Mint. Online cab aggregator Uber had contested the state’s authority to frame the rules and the legality of the rules.
According to the report, Uber has a month to get a license and follow the guidelines in order to operate in the state. The court said that a criminal complaint filed against a driver or an employee would not be grounds to cancel the aggregator’s license.
According to an Economic Times report, the court has also upheld the aggregator rules which demand a panic button, 8 hour work days for drivers, permits other than All India Tourist vehicles and displaying taxi boards atop the vehicle. However, the court said that there should be no minimum limit on the aggregator fleet size, struck down a rule which asks for passenger personal information citing abuse of power and violation of a person’s right to privacy and rejected the security deposit of Rs 100,000 for 1,000 taxis.
Note that Uber is facing the “drivers are employees” problem across the globe. Recently, a UK court ruled that Uber’s drivers were in fact employed by the company and were entitled to employee benefits.
For the Karnataka HC’s ruling, Uber told MediaNama that is it yet to receive a copy of the order and will decide on its next steps after it gets one, while Ola is yet to respond to MediaNama’s query. Siddharth Pahwa, CEO of Meru Cabs said that the company was happy that the Karnataka HC ratified the taxi regulations drafted by State Transport Authority. Pahwa added, “In the recent past, predatory and surge pricing have severely affected customers and impacted the growth of the sector. The new draft of regulations are progressive and have tackled the issues of pricing as well as permits in an effective manner.”
When the guidelines came out this February, MediaNama had pointed out that the rules for app based taxi aggregators were a mixed bag of good (no cap on number of vehicles unlike Maharashtra’s, annual leaves for drivers, no surge pricing), bad (Karnataka domicile for drivers, working knowledge of Kannada) and ambiguous (control room facility).
Ola reportedly received its aggregator license for the state in June this year after registering and providing the necessary information of 100 vehicles to the transport department. At the time, 6 companies had applied for an aggregator license: Uber, the now-dead TaxiForSure, Ridz, Welink and Shreyas.
The Karnataka government hasn’t been easy on cab aggregators: in May, it ordered Uber and Ola to suspend operations in the state since for not having licenses and impounded 60 cabs from the Bangalore airport that same month. (More from a driver’s perspective here.)
Recently, Uber has also raised objections to the newly proposed Maharashtra City Taxi Rules 2016 calling them unviable and suggested open fare pricing. Ola, on the other hand, has said there is “the need for adequate regulation to curb predatory pricing and capital dumping in the interest of co-existence of all players in the ecosystem,” in its suggestions to the Maharashtra government.