The recent ban on bike taxis in Karnataka is not only deeply misguided, but also a perfect reflection of the governance gap that exists in Karnataka and how that gap has been exploited by incumbent vested interests.
This final ban is the culmination of a protracted legal tussle between the government and commercial operators. The Karnataka state’s transport department had earlier asked app-based ride hailing services to suspend their bike-taxi offerings as it was deemed to be illegal. The department maintained that using two-wheelers registered for private use for commercial purposes such as bike-taxi services is illegal under current regulations. On April 2, 2025, a single-judge bench ordered all bike taxi operators to suspend their services statewide, citing the absence of a formal regulatory framework under the Motor Vehicles Act. This judgement was challenged by the ride-hailing companies, but the court did not budge, given the state government’s refusal to formulate regulations for bike-taxis. Thus, the ban on bike-taxi services takes effect on June 16.
The Governance Gap
The High Court’s position is legally sound – in the absence of clear rules or guidelines, bike-taxi service is not even recognised as a legal economic activity under the Motor Vehicles Act and thus, cannot be allowed. If we must point the finger, it has to be at the Karnataka government for failing to draft a policy around this issue. It is not like they were caught off-guard on the topic. Bike taxis were first introduced in Bangalore ten years ago in 2015 by Rapido and has been legally in existence in a neighbouring state (Goa) since the 1980s. Surely, that’s enough time to formulate a policy framework for legalising this service.
It is quite ironic that the government is banning a valuable service because its own rules don’t recognise it as a legal activity. It represents a complete failure of imagination and is the laziest possible route. Bike taxis are dangerous in the absence of rules, claim the officials. So, here’s a novel idea: frame the rules instead of banning them. Cars can also be dangerous without rules about seatbelts, airbags, speed limits, and traffic regulations. Thankfully, we did not ban them.
Karnataka can look around for inspiration. The union government already has guidelines on how to make this work. The Maharashtra and Goa governments have a regulatory framework around safety - mandatory helmets, insurance, driver background checks, GPS tracking, and speed limits. If the question is about revenue, surely the taxman is innovative enough to take a slice of the pie in ways that doesn’t destroy the economic value of these services.
Impact on Traffic
The nightmare that is Bengaluru traffic requires all forms of innovative solutions to make commute and life slightly more bearable and instead, credible options are being removed from the choice architecture. Bengaluru is one of the slowest cities in the world for driving. The bike taxis provide a solution to a crucial urban mobility challenge, that of last-mile connectivity that feed into the public transport system. At peak hours, when a commuter faces endless cancellations by auto drivers and cabs; bike-taxis is a flexible, cheap and fast alternative that can navigate through the traffic snarls in an effective manner. Bike taxis did nearly 8 crore trips in a year, for which there is no viable alternative now.
Unfortunately, every single innovation by private players to offer a solution must first overcome an epic battle with the omnipotent bureaucratic inertia and the invincible political economy. Shared autos do not ply in Bengaluru, private busses are not allowed, shared taxis on apps were banned, and even carpooling for profit was disallowed. It’s a government at war with its own people. At every step of the way, private enterprise that can ease the burden of the ordinary commuters are throttled and suffocated while the citizens are buried under the avalanche of government incompetence and inefficiency of public transportation.
The Green and Yellow Elephant
Any analysis of public transport in Bangalore cannot be complete without addressing the biggest elephant in the room, which is the stranglehold that the auto unions have had on successive governments of Karnataka. Recall that every single novelty in public transport has faced government hurdles and this is in no small measure thanks to the lobbying efforts of the auto unions. It is a bit rich that the government is suddenly concerned by the rules and regulation, though it has turned a blind eye towards the blatant rule violations by auto drivers over the years – the metres are a dysfunctional relic, for example. Much more damaging than not following the meters is the use of violence and force against competitors. On more than one occasion, bike taxi drivers have been beaten up or physically harassed by auto drivers for “running on their turf”.
When political machinations outweigh sound economic reasoning, regulatory hurdles such as this can severely damage the economy. There are nearly 1,00,000 bike taxi operators who are on these platforms that will be left without a means of earning their livelihood. Most bike taxi operators do not do this as a gig or a side-hustle but follow it as their main source of income.
Instead of giving in to short-term political economy calculations, it is time for the government to consider the larger public welfare and scrap the blunt instrument of a ban and instead create a safe, regulated, and sustainable bike taxi ecosystem.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
