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Karnataka Govt Orders Ola & Uber to Stop Operations With Immediate Effect

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Cab Operator Regulations

Karnataka has not been very kind with cab-aggregators in the recent past, and by banning surge pricing in the state and seizing bike taxis only a few days after launch, they are making it difficult for startups to do business.

Bengaluru being one of the largest cities in India, and the largest in Karnataka, is one of the cab-aggregators’ biggest market in the country. Following a notification from Karnataka State Government, Uber and Ola have been ordered to suspend their unlicensed cab operations immediately in the state.

Talking about the circular, Rame Gowda – Transport Commissioner, said “We have not imposed any ban on operations of app-based taxi aggregators. We have asked those aggregators who are offering their services without a licence to stop their operations immediately.”

Although this is temporary and we know Ola and Uber will get the necessary done soon, but even a short ban can cause a lot of havoc in a congested city like Bengaluru and take away income of a lot of cab drivers.

Notification from the Transport Department

To operate cabs and taxis in the state, app-based aggregators must obtain licenses, which Uber and Ola have not received yet. This is a violation of a notification released on April 2 this year that sets up rules for app-based cab aggregators to comply in the state.

According to section 93 of the Motor Vehicles Act, 1988, any person involved in running a cab service must obtain a legitimate license from appropriate authorities. A form needs to be filled out along with a registration fee to get a license of upto 5 years.

The notification also lays down some regulations to be followed regarding hiring drivers, their qualifications and requirements, cab and taxi conditions and general conditions to obtain a license. Gowda also said that Uber and Ola have applied for licenses but are pending completion because of incomplete background check of drivers and inadequate security measures in the cabs.

You might remember that Uber continued to have surge pricing on their app despite ban from Karnataka Government which did not go down well with the Government and some cabs were even seized in that matter. All this has added to Government’s frustration in getting the cab aggregators to comply with the rules.

What next for unlicensed cab aggregators?

While the Government wants the cab aggregators to get a license to operate in the city, it has also agreed to mend the rules set by April 2’s notification to ease the cab operations in the state.

Uber and Ola have already applied for licenses, but a background check of drivers is definitely mandatory to ensure safety of riders. At least till the debate gets resolved, customers in the state are going to experience discomfort, especially with the IPL season on.

Recently Uber agreed to Delhi Government’s proposal to cap taxi tariffs in the city and this was a big blow to the maverick cab aggregator. We’re optimistic about Ola and Uber in Karnataka and will keep you updated with the latest news from the Government.

Source: Business Standard

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