Kerala Follows Delhi and Karnataka, Formulates Strict Rules for Cab Aggregators


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Recently, the Delhi and Karnataka Governments drafted a set of rules in the respective states to curb surge pricing and regulate the cab-aggregation market run by large players like Ola and Uber.

Kerala has taken inspiration from the two states and has released a draft policy for cab-hailing services like Ola and Uber in the state. The discussions will be initiated with the respective stakeholders soon, before it is converted into a law.

The draft comes at a time when some states are looking to tighten the market which does not have strict regulations. Either some aggregators do not have licenses to run the service, or some charge customers with a very high bill amount.

Kochi and Trivandrum and the largest cities that have Ola and Uber plying on the roads, and the cab-aggregators are looking to expand to other smaller cities in the state.

Excerpts from the draft policy

First and foremost, the policy defines the term ‘aggregator’ as a service provider or an operator that connects the driver and passengers via an online service, web and mobile applications, through a call center or by any technological means.

The service has to act as an intermediary here to allow drivers to connect with the passengers and vice versa. Any service that complies to 1956 Companies Act and regulations under the Information Technology Act (2000) will be allowed to hold a license for up to 3 years.

Just like Karnataka’s policy, cab aggregators have to get a license to ply cabs on the road. In case of Kerala, drivers will also have to pay Rs. 100 every year to the transport department to register with one of the cab aggregators.

Other mandates include having a 24×7 call centre service for customers, something we know Uber doesn’t believe in, and install GPS-based tracking devices in the cars. Kerala too will decide the prices of the cabs, leaving no space for competition and incentives.

The draft also states that the aggregator should have a panic button in the app for safety, and have regular and thorough background checks of the drivers. Failing to adhere to these rules can lead to cancellation of licenses.

Are some rules curbing competition in the market?

We all agree that these cab aggregators do not force proper safety services and there have been cases of harassments from both the customers and the drivers. Some rules, on the other hand, have been seen to be too far-fetched for a free market like India.

Too many restrictions in a business tend to shoo away the leaders and hinder its growth. Uber is still in a battle with the Karnataka Government for the ridiculous number of regulations the state has introduced.

The draft policy will be discussed soon with the stakeholders and we hope the state comes out with a good law for cab-aggregation.

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