On Friday, a shocking news came from the Silicon Valley of India – Bengaluru, that the RTO has banned the taxi aggregator company for 6 months.
The ban was imposed after the taxi-aggregator company violated its license condition by operating bike taxi illegally in the city.
So, how operating bikes is illegal?
For this we need to understand that Karnataka On Demand Transportation Technology Aggregators Rules 2016 allows Uber, Ola, and other aggregator companies to run only taxis and not the bikes. This is because of the lack of policy framework.
This is not the first time that state has acted against the Ola and other can aggregator companies.
In the month of February, they seized around 500 bike taxis which were operating illegally. Apart from Ola, Rapido has also been asked to stop their services.
“The order was issued on March 18 but it was communicated to Ola only today (Friday).
They will have to submit their license to the RTO within three days of receiving the order. Booking on Ola from Friday is illegal,” said the Joint Commissioner of Transport.
The official notice further mentions that the suspension was awarded to them as their reply to the notice was unsatisfactory.
An extract from the notice reads “Earlier this year, Transport Department officials had seized several bikes which were operating as bike taxis for Ola.
The officials probed the case and submitted a report to the Transport Commissioner.
According to section 11 (1) The Karnataka On Demand Transportation Technology Aggregators Rules 2016, the Transport Department can decide to cancel the license of the cab aggregator as there is a violation of rules,”
The notice further added that “Prior to this, a notice must be sent to the company in question. Hence on February 15, 2019, the Transport Department had sent Ola a notice, asking the company to respond to the findings of the probe.
Ola sent its reply on March 3, 2019. As the company’s reply was not satisfactory and did not provide any evidence which proved it did not violate norms, the Transport Department, as on March 18, 2019 has decided to suspend the license of Ola for a period of six months.
Ola will have to submit the original copy of the license within three days of receiving a copy of this order,”
Earlier, Ola had proposed to run a structured pilot for its bike-taxi service which was for the duration of four months. However, the transport department rejected their proposal.
It’s interesting to note that the bike taxi services are successfully running in many other cities. However, it’s illegal in many other cities including Bengaluru.
Bike-taxi services offer an economical and convenient alternative in cities which are struggling with the issue of traffic congestion.
Ola’s rival Uber and Rapido have already entered in this segment and have been successful. Ola would surely want to give them a tough competition in that segment.
Ola responded to the ban in their statement which says “Ola is a law-abiding company that has always worked with the Government to develop livelihoods, improve mobility, and enable a new technology industry.
We are evaluating all options to find an amicable solution wherein hundreds of thousands of driver-partners in the state of Karnataka can continue to work and serve the mobility needs of our citizens.
We have been closely working with the authorities on this topic, responding to queries and making proactive representations to the ministry.
Despite other companies continuing to operate illegally, Ola halted our 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.”
They further added that “This notification is unfortunate, and we look forward to an opportunity to address these concerns directly with state officials to find a solution for our driver-partners and millions of Ola users in Karnataka.”
The president of Karnataka Auto and Taxi Federation Tanveer Pasha also responded and said “Ola and Rapido companies were operating two-wheeler cab services without proper permissions required from RTO.
We from OTU and Karnataka Auto and Taxi Federation had brought this to the notice of the Transport Department. Based on our complaint about the same the Transport Department has issued a notice to the concerned companies.
On no response from the companies it has issued a notice to submit its aggregator license in the next 3 days or else they would take the legal actions against the companies.
Also, the Transport Department is taking action against Rapido Company.”
The latest update
The ban on the ride hailing giant Ola was finally revoked after the Karnataka state transport authorities charged them with Rs. 15 lakhs of fine.
The news came through a tweet from the Minister of social welfare, Priyank Kharge which stated “@Olacabs will run their business as usual from today.
However, there is an urgent need for policies to catch-up with new technologies & also industries too should work closer with Govt to help evolve policies for innovations.”