Logistics start-up Porter violates rules, Karnataka transport department books drivers

Moneycontrol has reached out to Porter and the story will be updated when the company responds.

Section 93 of The Motor Vehicles Act, 1988, says that no person shall engage himself as an agent in the business of collecting, forwarding, or distributing goods carried by goods carriages unless he has obtained a licence from the appropriate authority and adheres to the conditions prescribed by the state government.

"In the past week alone, we have booked more than 100 cases against Porter drivers in Bengaluru. I've also instructed the Regional Transport Officer (RTO), Central (HSR Layout) to issue a notice to Porter since it falls under their jurisdiction," Mallikarjun said.

"We are taking action against drivers as they are putting the company's advertisements on their vehicles. A fine of Rs 5,000 each is being imposed on such drivers."

He added that Porter can apply for the permit from the department to operate in the city. "We decided to take action due to complaints we've received from drivers," the official added.

Porter's fleet can be broadly categorised into two groups: vehicles with permission and advertisements displayed (20-25 percent), and those without any advertisements (75-80 percent). Among the first category, a smaller subset of vehicles is running ads without valid licences, resulting in traffic violations.

Porter has onboarded over 5 lakh driver partners and is present in more than 18 cities. It operates over 2,000 light commercial vehicles (LCVs) across regions, as reported earlier. 

The company is working on obtaining valid licences covering all vehicles in the first category. However, if they face legal challenges, they might cease advertising on vehicles operating in Karnataka entirely, individuals familiar with the company's plans told Moneycontrol.

Porter's plans

"We have reported these violations to transport department officials. They are operating without any permits and are displaying advertisements on vehicles, which only Bangalore Metropolitan Transport Corporation and Karnataka State Road Transport Corporation, among other state-run transport agencies are authorised to do. Porter is now purchasing its own vehicles and hiring drivers so the drivers of the attached vehicles are not getting enough duties," leader of drivers’ union at Karnataka Rajya Chalakara Parishath, K Somashekar, told Moneycontrol. Valued at over $500 million, Porter was founded in 2014 by Pranav Goel, Uttam Digga and Vikas Choudhury. The startup had revenues of Rs 862 crore in FY22, more than double of Rs 328 crore in FY21, the latest available data on Tracxn showed. During the same period, the company's loses also jumped from Rs 64 crore in FY21 to Rs 122 crore in FY22.

While the Karnataka transport department is taking a closer look at Porter's operations, it has also locked horns with aggregators providing passenger services such as Ola, Uber, and Rapido. Mallikarjun said that they will also initiate action against QuickRide for operating without obtaining a licence from the department.