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Restrict data storage norms and relax licensing for aggregators: Stakeholders Weigh in on the new Aggregator Motor Vehicles Scheme

The IAMAI criticised the scheme for introducing a licensing regime for aggregators and delivery service providers in Delhi.

E-commerce and tech-stakeholders Internet and Mobile Association of India (IAMAI) and National Association of Software and Service Companies (NASSCOM) recently sent individual submissions to Delhi’s Transport department voicing concerns about the stringent regulations imposed on aggregators, e-commerce entities, etc., under the Delhi Motor Vehicle Aggregator and Delivery Service Provider Scheme (DMVADSPS), 2023.

What is this scheme? The Delhi Motor Vehicle Aggregator and Delivery Service Provider Scheme (DMVADSPS), 2023 regulates the vehicles operated by aggregators and delivery service providers (DSPs) and pushes these entities towards electronic vehicles (EVs). It applies to any aggregator, DSP and e-commerce entity “with at least 25 motor vehicles,” and focuses on regulation around licensing and its suspension, declaration of the vehicular fleet, compliance requirements for relevant entities, penalties and appeals.

NASSCOM and IAMAI have taken a closer look at specific provisions of this scheme, like data storage and sharing and licensing regulation, to suggest the following amendments:

On data storage

Hold off on data storage until the national data protection law is out: Clause 6(12) of the draft scheme requires that “data generated on the app is stored on a server in India and that such stored data shall be for a minimum of 3 months and a maximum of 24 months from the date on which such data is generated.” The IAMAI said that this should not be made a precondition for license issuance since the storage and sharing of personal data will be more comprehensively addressed through the Digital Personal Data Protection Bill of 2022.

Vehicle and driver-level data should remain at the aggregate-level:As per the scheme, aggregators and DSPs must declare details of onboarded vehicles, including registration certificate of vehicles, vehicle category, fuel type, and any other details as may be prescribed by the Transport Department. NASSCOM said, “Given that the need for submitting this data has not been established in the Scheme, we submit that maintaining detailed data and sharing only aggregate data would solve the purpose of effective implementation of the Scheme.”

On licensing 

Relax provisions around licensing of entities: The scheme states that any applicant seeking a License to operate as an Aggregator must do so within 90 days of the notification of the scheme. In the case of Delivery Service Providers, this must be done before operations begin. Failing to do so will result in a fine of up to INR 1 lakh but not less than INR 25 thousand in a single instance as well as impounding of any such vehicle.

However, the IAMAI called for the elimination of the licensing requirement altogether, at least in the initial stages of implementation. It asked that delivery service providers and e-commerce entities be exempt from such licenses. It also asked that aggregator license renewals be granted for five years instead of three years.

License fee should be lower: The scheme established a ‘License Fee’ based on the fuel-composition of the fleet on-boarded by the Aggregator or Delivery Service Provider at the time of declaration of vehicles. This fee structure can be seen in the table below:

NASSCOM said that this per-vehicle fee is too high and will discourage drivers from onboarding on multiple platforms, which has been the norm thus far. It suggested the license fee amount and structure should be revised to bring it at par with other states and “with a view to minimise the compliance burden on the ecosystem.” Similarly, the IAMAI suggested that it should not exceed the amount prescribed in the Motor Vehicles Guidelines of 2020.

On exemptions

Exempt DSPs and e-commerce entities from compliance clause: DSPs to have the following vehicle-related information: registration, permit, fitness certification and Pollution Under Control certificate. However, DSPs do not restrict delivery partners to use a specific two-wheeler vehicle to make last-mile deliveries and so, such details are not associated with a specific delivery partner’s ID. So, the IAMAI recommended that DSPs’ two-wheeler vehicles should be exempted from the purview of this clause. 

Similarly, Section 9(1) of the scheme mandates e-commerce entities to ensure that “fleet operators and transport-service providers associated with them are duly licensed.” E-commerce players rely on third-party DSPs, who have the authority to make operational decisions. As such, it asked that DSPs be held liable for meeting these obligations instead.

Aggregator, DSP not to be made responsible for parking: The scheme suggests that the aggregator or DSP shall ensure proper parking for all its vehicles in the NCT of Delhi. The penalty for defaulting on this provision is suspension of the license for 10 days to 6 months, and repeated non-compliance can lead to cancellation of the license. NASSCOM argued that these responsibilities should be levied on the driver or owner of the car because the aggregator/ DSP typically does not own the vehicles on its platform.

On number of vehicles managed by entities

Scheme’s mandates should consider current status quo of vehicles: The NASSCOM suggested EVs target adoption should align with the availability of vehicles and supporting infrastructure. The stakeholder said electrification mandates should be imposed by assessing data on:

  • Number of EVs registered in the city segment-wise vis-à-vis ICE vehicles.
  • Number of EV owners/drivers willing to be onboarded on aggregator platforms, for different categories of vehicles.
  • Number of registrations for EVs made in the last 6 – 12 months. Periodic updates/ reports on EV adoption.

It also advised for the creation of a working group of aggregators and DSPs to promote the adoption of EVs with partners that find it commercially feasible to do so.

Hard to declare vehicular fleet under current scheme: The IAMAI said it is difficult for aggregators and DSPs to declare all on-boarded vehicles in use within 90 days from the scheme’s publication because most 2-wheelers are owned and shared among associates. So, there is a considerable degree of variability regarding the exact number of vehicles.

“Given the existence of this significant variability regarding the exact number of vehicles, attempting to operationalise the proposed scheme, particularly for 2-wheelers, would be impractical. Therefore, we request that such a mode of declaration be reconsidered,” said IAMAI.

On security and grievances

Remove mandate for a separate panic button: Many aggregator apps already have in-app panic buttons. The IAMAI asked that these be deemed “acceptable by virtue of being the most optimal and safe solution.” It suggested that the buttons be connected to appropriate state agencies rather than to aggregator control rooms. “Aggregators may be required to ensure the availability of in-app panic buttons during the onboarding of new vehicles and safety support systems. Additionally, aggregators should be permitted a reasonable timeframe for any necessary integrations with state agencies,” it said.

Many drivers are associated with multiple aggregator apps at any given time. A situation could arise where a passenger of one aggregator accidentally triggers a panic button linked to a different aggregator’s control room, costing time during an emergency.

Graded approach for consumer grievance regulations: The IAMAI suggested a graded approach for consumer grievance regulations considering the urgency and nature of complaints received. It also said the Delhi government should refrain from introducing parallel requirements that deviate from existing central standards to prevent a convoluted consumer redressal system.

Penalties should be incentive-based: The IAMAI asked that the policy retain an incentive-based approach as opposed to a penalty-based approach. The establishment of an escalation mechanism before the imposition of penalties ensures a fair and transparent process for all stakeholders involved, it said.

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I'm interested in the shaping and strengthening of rights in the digital space. I cover cybersecurity, platform regulation, gig worker economy. In my free time, I'm either binge-watching an anime or off on a hike.

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