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Karnataka Issues License to Ola; Becomes India’s 1st Licensed Cab Aggregator

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Ola Cabs Lux car rental mobile app

Ola Cabs has finally received license to aggregate cabs and offer them to customers in Karnataka.

After setting base 6 years ago and after creating a network of 200,000 cabs across 85 cities and raising around $1.2 billion in funding, $5 billion Ola Cabs has become India’s first licensed cab aggregator, albeit only for Karnataka as of now.

In April 2nd this year, State of Karnataka implemented the ‘Karnataka On-Demand Transportation Technology Aggregators Rules 2016’ which literally banned cab aggregators like Uber, Ola among others due to strict implementation of rules. As per the guidelines of this act, cab aggregators cannot surge pricing; tariffs cannot go beyond Rs19.50 /km for an AC taxi and Rs 14.50 /km for non-AC taxi; installation of GPS in every cab is mandatory among others.

Five such cab aggregators had applied for licenses under this rule, out of which Ola has become the 1st one to get it.

Verification of minimum 100 cabs were required to be presented in order to get this license, and Ola did exactly that.

H G Kumar, state transport authority officer said, “I have signed and approved the license for Ola on Monday. They are now legalized as cab aggregators in Karnataka. But they have furnished details of 100 vehicles only. They have to make several other arrangements as per the new regulations.”

Uber too has applied for this special license,on behalf of their sister concern Welink, and they are awaiting results.

Kumar further said on Uber’s case: “They have furnished 100 vehicles for testing and the KR Puram RTO is undertaking the job. However, we think it is all aimed to divert attention. Welink is said to be their sister concern, the application says so.”

Besides Ola and Uber, Shreyas and Ridz are other two cab aggregators which have applied for licenses and awaiting results. Name of the 5th cab company is unknown as of now.

Both Ola and Uber have been facing legal action in Karnataka due to implementation of the Karnataka On-Demand Transportation Technology Aggregators Rules 2016.

In early April, Karnataka banned Ola and Uber from surging their price; later in 3rd week of April, police started seizing Uber and Ola cabs for the same reason (and we had question about preserving free market fundamentals) and on May 30th, Karnataka placed an immediate ban on both Uber and Ola.

Delhi CM Arvind Kejriwal has also threatened to ban such online cab aggregators due to surge pricing and other issues.

Will such licensing of cab aggregators set a precedence across India? We will keep you updated as more details come in.

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