Ola, Uber, Rapido will need separate three-wheeler licences to run autos on platforms, says K'taka Transport Dept

Both Uber and Ola are currently facing the ire of customers in India for random surge pricing. (Image source: Reuters/Representative)

The Karnataka Transport and Road Safety Department on Tuesday directed the cab aggregators Ola, Uber, and Rapido to apply for a separate license to run and operate three-wheeler autos on their respective platforms.

"We discussed with the companies (Ola and Uber) with regards to pricing and license. After reviewing we have directed the companies to apply for an auto aggregator license within the next one day, " Said T.H.M. Kumar, commissioner of Karnataka Road Transportation and Safety.

The commissioner clarified that companies are asked to stop plying auto services from Wednesday and if the autos continue to run or be allowed to book by passengers, the company will be charged a fine of Rs 5,000 per vehicle, per day as the first offense.

Commissioner Kumar clarified that the passengers or the auto drivers will not be held accountable for the bookings.

The Transport Department has reiterated its stance that the aggregator-run three-wheeler autos are illegal and said that they cannot run under the cab aggregation license.

"The companies should apply the license to the Transport Department immediately, we will process it and send it to the Central Government till then no autos should run through the aggregator platforms, " The commissioner said.

The aggregators submitted a response on pricing which stated that the companies will charge a base fare of Rs 30 for the first two kilometres and Rs 15 per kilometre for the ride as per the government rules. Above this a convenience fee of Rs 40 per ride and a GST of 5% is levied on each ride.

However, the commissioner said that a separate meeting will be held on the computation and limit of charging a convenience fee.

The Department is yet to clarify the license issues of Rapido and Uber's bike taxi. The matter on the Bike Taxi license is pending with the Karnataka High Court where Rapido last year had filed a writ petition pointing out that its application for grant of bike aggregator’s licence to the Commissioner of Transport was rejected while issuing an endorsement that the company had to apply under the Karnataka Electricity Bike Taxi (KEBT) Scheme 2021.

"The Transport Department should take a bold stance and ban the services of Ola and Uber's autos. There is no clarity on surge pricing and on the penalty for the illegality, " said Amruthesh NP, who is the lawyer representing Bharat Transport Association Group.

"The Transport Department should take a bold stance and ban the apps," Added Amruthesh.

The Karnataka Transport Department on 7th of October issued a notice to stop services of all aggregator-run autos like Ola, Uber, and Rapido in Bengaluru for the next three days and asked for a report on surging ride prices.

“As per the provisions under On-Demand Transportation Technology Act 2016 aggregators are given license to provide taxi services only, taxi means a motor cab having a seating capacity not exceeding 6 passengers excluding the driver with public service permit on contract", said the transport commissioner THM Kumar in a notice issued on Thursday.

Ola, Uber, and Rapido did not share an official comment.

However, an industry source close to the development said that even to apply license for autos there are no proper guidelines and systems in place.

"For cab aggregation, there is a set of rules and regulations and policies to refer to but for auto aggregation, the government hasn't set up anything yet, " said the industry source on the condition of anonymity.

"What the ban can do is that around Rs 100 crore of revenue that the aggregators give to the government will be lost and auto offline is unregulated and the whole aspect of safety is questionable, " The person quoted above said.