MC Explains: Why Supreme Court upheld the ban on bike taxis in Delhi?

Bike taxis are legal in states that have a policy for the registration of two-wheelers as taxis, while in states that do not have such a policy, they are illegal. In this case, the Delhi government’s argument was that they would soon be implementing a policy for the registration of two-wheelers as taxis. In the absence of a policy for the registration of two-wheelers as taxis, they cannot ferry passengers for a fee without permission or a licence.

Some states in India have been permitting bike taxis for quite some time. For instance, bike taxis have been legal in Goa since 1981. Since then, over 12 states, including Punjab, Haryana, Bihar, Jharkhand, and Madhya Pradesh, have come up with policies for the registration of two-wheelers as taxis.

However, this policy is at different stages of deliberation in many states, including Maharashtra and Karnataka.

What was the transport department’s order?

On February 19, 2023, the transport department of the government of the National Capital Territory (NCT) of Delhi issued a public notice prohibiting the use of two-wheelers by aggregators.

According to the order, the use of two-wheelers having a private registration mark or number to ferry passengers on hire is illegal and is in violation of the Motor Vehicles Act, 1988. The order also said that using private vehicles to ferry passengers is a commercial activity and cannot be done with private registration.

The order specifically noted that some digital platforms are facilitating such operations by offering bookings through an app. Aggregation of this form is also in contravention of the provisions of the Motor Vehicles Act, 1988.

Aggregators such as Rapido, Uber, and Ola connect the end-user of a bike taxi with the drivers and take a commission for the same.

The transport department also sent show-cause notices to Rapido and Uber in February 2023.

Delhi High Court’s order

Aggregators Rapido and Uber approached the Delhi High Court, challenging the validity of the order of the transport department. During the hearing at the Delhi High Court, the NCT’s government informed the court that it was framing a policy for the registration of aggregators that is likely to be implemented by the end of July.

However, in May 2023, the court stayed the transport department’s order and noted that the stay would operate only until the Delhi government’s policy is implemented and notified.

Aggregators taken to Supreme Court

The Delhi government moved the Supreme Court against the order of the Delhi High Court. In the SC, the NCT government contended that without obtaining a proper licence or permit, the aggregators were plying non-transport vehicles for hire, and this was in violation of the Motor Vehicles Act, 1988.

The aggregators argued that in spite of the central government coming up with a policy on the operation of aggregators in 2020, the Delhi government has not yet come out with their own policy, and under such circumstances, the aggregators were left with no option but to run their business. Thus, they argued that Delhi HC was justified in staying the operation of the ban. The aggregators further argued that the livelihoods of many bike taxi operators could be in danger if the ban was brought back.

The Union government also informed the SC that an aggregator was required to obtain a licence to operate bike taxis.

The court thus concluded that an interim order staying the ban on bike taxis was not required to be passed considering that Delhi was already in the process of finalising the policy. The court further noted that since the bike taxi operators were not the petitioners in the court but the aggregators had moved the plea, their case cannot be put forth by the aggregators.

Thus, the apex court vacated the Delhi High Court’s stay on the ban on bike taxis.