Taxi aggregators like Uber and Ola will now be treated as “digital intermediaries” according to the Motor Vehicles (Amendment) Bill 2019, which was passed in the Rajya Sabha on July 31. Importantly, while these aggregators will be issued licenses by state governments, as has been the case so far, state governments will now have to work on the guidelines issued by the central government in order to provide licenses to aggregators. It also mandates that aggregators comply with provisions of the IT Act, 2000. Violation of licensing conditions could lead to a penalty between ₹25,000 and ₹1 lakh. An earlier speculation that Aadhaar will be made mandatory for getting drivers’ licences and registration certificates, isn’t part of the new Bill.

The new amendments to the bill also propose digitisation of processes like issuance of learner’s license, payment of fines and penalties and electronic monitoring of roads for improving “safety”:

  • Electronic monitoring and enforcement of road safety: The bill inserts a new section 136A which mandates state governments to ensure electronic monitoring and enforcement of road safety on national and state highways, and urban roads. It also directs the central government to make rules for the electronic monitoring and aid system through installation of speed cameras, CCTV cameras, speed guns and body wearable cameras.
  • Issue or grant of licenses or permits: The bill suggests that a licensing authority may issue a learner’s licence in electronic form under central government guidelines.
  • Receipt of money (including fines): Receipts and payments of money should be done digitally.
  • Forms or applications: The bill proposes that forms, applications or any other documents with any office, authority, body or agency owned or controlled by the central or state government should be done electronically.
  • Change of address: Users should be able to change addresses on licences digitally.

Taxi aggregators function in a vacuum, Indira Jaising tells SC

Meanwhile, at an ongoing case in the Supreme Court regarding women’s safety yesterday (NB: before the Bill was passed), the apex court directed the Centre to formulate laws for regulating app-based taxi services like Ola and Uber. Senior counsel Indira Jaising told the Court that aggregators need to be regulated since they are “functioning in a vacuum”. She also said that these aggregators don’t fall under the Motor Vehicles Act since they identify themselves as application-based intermediaries, and also don’t comply with the IT Act.

Now with these amendments to the the Motor Vehicles Bill, cab aggregators fall well within its purview. However, while the government has identified aggregators as intermediaries, there is no directive yet on as to how they would be regulated and on what parameters.

Licensing of cab aggregators has so far been a state-only subject with the central government playing little role in it. This means that different states have different norms for licensing aggregators which decide pricing, number of occupants allowed among other things. Recently, the Karnataka government had directed both Ola and Uber to immediately withdraw ride-sharing services from their applications since ride sharing was not permitted under the Motor Vehicles Act, 1988 and the Karnataka on-demand Transportation Technology Aggregators Rules.

A few things that remain unclear

There is not much clarity on how exactly the central government wishes to regulate aggregators, at least from the amended bill. What exactly would the government regulate?

  • Would the government regulate pricing of cab aggregators? How would surge pricing, for instance, be regulated?
  • From the perspective of women’s safety, if a woman is harassed while traveling in these aggregators’ cab, would the responsibility of it befall on aggregators?
  • Will the existing state government guidelines for issuing licenses to aggregators co-exist with the centre’s guidelines, or would the central government guidelines take complete supremacy?
  • Will the government mandate a compulsory recall for faulty vehicles of these aggregators?
  • Will there be a directive from the central government to aggregators that they hire cab drivers based on certain parameters that are different from the current ones?