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Last Updated : Aug 02, 2019 07:37 PM IST | Source: Moneycontrol.com

Passage of Motor Vehicles Bill to usher in a smooth drive for Uber, Ola

The companies which so far were vaguely seen as taxi service providers will now come under the umbrella of marketplaces.

In a big relief to cab aggregators such as Uber and Ola, The Motor Vehicles (Amendment) Bill, which was passed in the Rajya Sabha this week will recognise this industry separately for the first time.

The companies which so far were vaguely seen as taxi service providers will now come under the umbrella of marketplaces.

The bill for the first time recognises these companies as aggregators.


The Rajya Sabha passed the Motor Vehicles (Amendment) Bill 2019 on July 31. The bill was approved in Lok Sabha on July 23.

It will now need the President approval to become a law.

Following the bill's passage, a new set of rules will be formed for the cab aggregation industry. So far the industry was broadly government by the Information Technology Act of 2000.

According to sources privy to the development, the transport department is already in consultation with aggregators and will come up with the policy soon.

The issue of safety has been given huge importance in the bill.

There is a possibility that the new set of regulation will also take into account the issue of surge pricing, which has sometimes faced flak from consumers.

However, it will still remain an overarching policy allowing the states to pick up relevant rules depending on the local needs.

"Anything to do with transportation, the centre will set the direction, the states will pick pieces which are relevant and that address their local needs," said an industry expert requesting anonymity.

"It is directional in nature. Until now, aggregators did not have any directional regulation. This bill refers to aggregators as technology companies governed under the IT Act 2000. So that in itself is a tremendous sense of direction for every company," he added.

It will be interesting to see how the states go about implementing the rules. The industry is hoping states will take into account local issues before laying down the norms.

For instance, Karnataka doesn't currently allow bikes to ply as commercial taxis. However given the infrastructure issues in the state with road congestion, it is logical for the state to consider allowing bike taxis there.

Bike taxis are allowed by states like Haryana and Uttar Pradesh.

"From an aggregators' point of view, if reasonably implemented, it is going to be a huge win for the ecosystem," said another industry expert.

"We welcome the Motor Vehicles Amendment Bill, 2019 which acknowledges that technology and innovation play a key role in transforming India’s mobility landscape. We will support the government's vision to harness technology for improving transport infrastructure, processes and safe," said an Uber spokesperson.

Ola did not respond to a query seeking comment on the bill.
First Published on Aug 2, 2019 07:36 pm