The Shocking Reason Why Ola Is Banned In Bengaluru For Next 6 Months

In a huge setback to Make in India cab-hailing app Ola, Karnataka Govt. has suspended their license, and this means that they cannot run their operations in Bengaluru for the next 6 months.

Why has this happened?

How will Ola resolve this issue now?

Ola Banned in Bengaluru For 6 Months: The Reason

State transport authority in Karnataka Govt. has immediately suspended Ola’s license to operate in the city. This is a ban, for 6 months.

The real reason behind this ban is Ola Bike Taxies, which have been operating in the city since last few months.

An unnamed official from Bengaluru based State Transport Department said,“There is a violation of rules as bike taxis are not part of the license issued to them (Ola),”

Ola and Uber and other ride-sharing apps have been granted a license under ‘Karnataka On-Demand Transportation Technology Aggregators Rules 2016’, and bike taxis are not allowed as per the rules.

Is This Ola Ban Fair?

As per initial observations, this ban is totally uncalled for, and definitely not fair

In the month of February this year, Karnataka’s State Transport Authority has declared Ola’s Bike Taxis as illegal and had seized several bikes belonging to Ola drivers. Not only Ola, but another bike taxi startup: Rapido was ordered not to run bike taxis in the city.

The order was acted upon, and Ola had suspended all bike taxi rides in the city.

But now, all of a sudden, out of the blue, the ban has been imposed on Ola cabs as well, by suspending their license.

While announcing the suspension of Ola cabs in Bengaluru for 6-months, State Transport Authority said, “Under the license, only app-based taxi services were permitted and there was no permission for bike taxis,”

Ola Responds On This Suspension Of License

Ola has termed this ban as unfortunate, and have promised to work with the Govt. for resolving this issue.

In a statement, Ola said, “…. Despite other companies continuing to operate illegally, Ola halted its bike-taxi experiment weeks ago, instead seeking the state’s cooperation to develop a legal framework for a pilot that will continue to take advantage of emerging opportunities in the mobility economy,”

In their defense, the State Transport Authority has stated that the response provided by Ola for bike taxis was not ‘satisfactory’.

Ola Banned in Bengaluru: The Impact

As of now, Ola provided 20 lakh rides per day, all across India.

Almost 80% of the rides come from top 7 cities in India, and, among them, Bengaluru is the biggest market for Ola, followed by Delhi and Mumbai.

Besides, ride-sharing services in India has been witnessing a slowdown, as the growth is down to 20-30%, against 100% month-on-month growth witnessed couple of years ago.

This sudden suspension of license for Ola comes at a critical juncture. Ola may lose some of its market share to Uber now.

We will keep you updated, as more details come in.