MC Explainer: What is the controversy surrounding carpooling in Bengaluru?

Transport department officials have also confirmed that they haven’t fined anyone Rs 10,000 for carpooling in Bengaluru. (Representative image)

Over the past few days, social media has been abuzz with chatter of a ban on carpooling in Bengaluru. Moneycontrol cuts through the noise and offers you the answers. Bengaluru, country's tech capital, has more than 1.1 crore vehicles including 75.2 lakh two-wheelers and 22.9 lakh cars.  A traffic index published by Dutch location technology specialist TomTom in February this year stated that Bengaluru was the world’s second-most congested city in 2022.

So what exactly is the fuss all about?

Social media posts claimed that the Karnataka government has imposed a ban on carpooling in Bengaluru and that violators will be fined up to Rs 10,000.

Is it true? Has the Karnataka government ordered a ban on carpooling?

No, there has been no such government order. Major carpooling aggregators like Quick Ride have said they haven’t received any notice from the transport department. Transport department officials have also confirmed that they haven’t fined anyone Rs 10,000 for carpooling in Bengaluru.

Also read: Startup hub Bengaluru: What makes it the world's second slowest city

How different are white-board and yellow-board vehicles?

According to the Motor Vehicles Act, white-board vehicles are meant only for private use and those with yellow boards are allowed to operate as transport vehicles.  For yellow-board vehicles, drivers have to get a public service vehicle badge (yellow badge), pay taxi permit fees, renew their vehicle fitness certificate every two years, pay high insurance premiums,  quarterly taxes, and special permit fees for interstate travel. Additionally, they have to renew their licence to operate a commercial vehicle every five years. Yellow-board vehicles also have higher depreciation.

For white-board vehicles, owners pay lifetime taxes, insurance and no additional permit for interstate travel since it is meant for personal use. While many drivers said the government should also allow them to operate with white-board number plates, allowing it may affect the safety of passengers. Since commercial vehicles cover greater distances and carry passengers, the fitness of vehicles is key and the insurance will cover passengers too.

So how did the Rs 10,000 fine come into the picture?

According to Section 192A of the Motor Vehicle (MV) Act, which deals with ‘vehicles without permits’, fines of up to Rs 5,000 for the first offence and Rs 10,000 for subsequent offences can be imposed. Officials have clarified that going by the MV Act, cases can be booked against permit violations under this section but haven’t announced any specific fine for carpooling violators. According to the MV rules, white-board number plate two-wheelers used for food and e-commerce delivery services are illegal.

So why has this suddenly become an issue in Bengaluru now?

On September 11, 32 transport unions staged a one-day strike, demanding various measures including banning carpooling services and regulating mobility aggregators. Following this, members of a cab drivers’ union harassed Quick Ride users at Manyata Embassy Business Park in Bengaluru’s Nagawara and claimed that carpooling is illegal, leading to the issue going viral on social media. In September, the Karnataka State Taxi Drivers Council submitted a complaint to the transport department against Quick Ride, alleging the use of white-board vehicles for commercial purposes. Officials stated they would examine the complaint as per the law and take further action.

Also read: Cab drivers’ union harasses carpooling app users in Bengaluru, calls it illegal

Is this issue specific to Karnataka?

No. This friction between carpooling aggregators and cab drivers exists in other states too. Maharashtra has banned the use of non-transport vehicles for carpooling. However, Bengaluru, known as the IT capital and home to many startups, has seen significant growth in carpooling over the past few years, especially on Outer Ring Road, Electronics City and Whitefield. Quick Ride alone has more than 13 lakh registered users, resulting in over 1.85 crore carpool trips in the last eight years in Bengaluru.  In fact, Bengaluru Traffic Police had proposed carpooling initiatives to reduce the number of vehicles on the city’s roads and ease congestion.

Also, read: Traffic cops propose carpooling, shuttle buses to ease congestion on Bengaluru's Outer Ring Road

What is the Karnataka government saying?

The government clarified on October 2 that there is no ban on carpooling, refuting reports. Transport minister Ramalinga Reddy said friends, neighbours or colleagues can carpool. However, carpooling using an app for monetary benefits requires obtaining a licence and operating with a yellow board.

Also, read: No ban on carpooling in Bengaluru, clarifies govt

How are carpooling aggregators reacting to all this?

KNM Rao, founder and CEO of Quick Ride, submitted a letter to the transport minister urging the state government to create guidelines similar to those in cities abroad. The letter from Quick Ride suggested considering carpooling (sharing of vehicles and costs without profit) as a non-commercial activity in line with NITI Aayog's recommendations and allowing it to continue in Bengaluru. They also proposed defining carpooling guidelines and policies within a framework, citing examples from Singapore and other countries that have defined carpooling exemptions in their road and transport laws. The letter argued that carpooling reduces traffic congestion and overall fuel consumption, with each carpool involving at least two colleagues and one less vehicle on the road.

Also, read: Quick Ride seeks guidelines on carpooling

Why are cab drivers protesting?

Cab drivers have been facing a significant financial crisis after Covid-19, with more tech companies switching to work-from-home arrangements. The expansion of the Namma Metro network and reduced incentives from aggregators also affected them. Drivers claim that carpooling and bike taxi services are eating into their earnings as they struggle with inflation and increasing rentals.

Also, read: Private transporters seek to regulate mobility aggregators

Did the state government ban carpooling using yellow-board vehicles?

No, the state government didn't ban carpooling with regard to yellow-board vehicles, even as aggregators like Ola and Uber, which offered 'Share' and 'Pool' services, discontinued these services themselves during Covid-19 to avoid strangers sharing vehicles. While cab users got cheaper rides, journey times were longer due to picking up multiple passengers en route, and sometimes it required detours. The transport department also said 'bike taxi services' using petrol-run two-wheelers are illegal but aggregators continue to operate them in Bengaluru.

What is the opposition's view?

Bharatiya Janata Party leader and Bengaluru South MP Tejasvi Surya said the Karnataka transport department does not seem to understand the difference between carpooling and ride-sharing.

"In carpooling, the owner of a private vehicle is heading to a pre-fixed destination of their choice and shares the ride with co-passengers on the route they are taking. They will make the journey even if they don't get co-passengers. The passengers, including the owner, share the expenses of the journey, and neither of them makes a profit out of the journey. In other words, only private, white-board vehicles can be involved in carpooling."

He explained: "On the other hand, ride splitting is like UberPool or Ola Share. A driver-for-hire with a commercial yellow-board taxi vehicle takes multiple passengers in the car and drops them wherever each passenger wants to go, on a common route with small detours. In this, only the co-passengers split the cost of the journey, and the driver profits from this activity. This is done in a yellow-board, commercial vehicle," he said.

What's the impact on car-pooling users?

The controversy has caused anxiety among carpooling users in Bengaluru. Many said they rely on these third-party apps to connect with verified users and share journey costs to and from their workplaces. Given the overcrowded Bengaluru Metropolitan Transport Corporation buses and their infrequent services, along with the limited expansion of the Metro network, a growing number of people are turning to carpooling apps as an alternative mode of transportation. Carpooling offers the advantages of affordability, comfort and convenience.

Carpool riders have the option to use 'points' to 'purchase' their ride, and carpool providers can accept these points. These points are stored in digital wallets like Paytm, where one point is equivalent to Rs 1. However, these points need to be redeemed by spending actual money. Carpooling apps charge a platform fee of 6-9 percent from users. Also, if the earnings from carpooling exceed the limit set by the Income Tax Act for transport or conveyance allowances, users are required to declare and pay taxes on these earnings. Car owners also need to choose to extend insurance coverage to passengers by paying an additional premium. Following this controversy, many individuals have started forming carpooling arrangements through WhatsApp groups instead of relying on carpooling apps.

What are the views of other aggregators?

In addition to Quick Ride, there are also carpooling apps like BlaBlaCar that are popular in Bengaluru. Hariprakash Agrawal, CEO of RideAlly, said: "We tried exactly this from 2014 to 2017 when carpoolers were not allowed to share costs, but it did not gain much traction. We took a stand where car owners could not earn from ride-takers as that was illegal. Later, a few apps came where they allowed people to earn, and RideAlly's user base decreased suddenly. We focused on carpooling within corporations, where employees could share rides among themselves, and corporations paid us on a SaaS basis."

What do central government guidelines say?

Clause 15 of the Motor Vehicle Aggregators Guidelines 2020 issued by the Union ministry of road transport and highways states: “In furtherance of the Central and state governments’ objectives to reduce traffic congestion and automobile pollution, and to effectively utilise assets, non-transport vehicle pooling may be provided by aggregators unless prohibited by the state government. The rationale for such prohibition shall be specified in writing and made accessible on the transport portal of the state government.”

So what’s next?

Reddy, the Karnataka transport minister, has said that he will look into the demands of carpool aggregators and take a decision within 10 days. Until then, carpooling apps can continue to operate.