In a major jolt for ride-hailing firms Ola and Uber, the Karnataka transport department has asked the cab aggregators to stop car-pooling services in the state, starting Friday.

The department has termed “share services” illegal under the Motor Vehicles Act, 1988 and the Karnataka On-demand Transportation Technology Aggregators Rules, 2016. The two aggregators have been given three days to amend the concept of car-pooling as per law, the Karnataka Transport Commissioner MK Aiyappa told BloombergQuint on Monday.

MK Aiyappa, Karnataka Transport Commissioner As per the Motor Vehicles Act, today the contract carriage can only operate between one point to another and cannot pick up and drop passengers in between. What they are doing is they are picking up passengers and are dropping them in between the trip and that is not allowed. So, they can only do car-pooling from point A to Point B,

Last week, the Karnataka Transport Minister had termed pooling services illegal and had asked ride hailing firms to apply for a licence. The decision to stop car-pooling in the state was announced during the meeting with senior Ola and Uber officials and drivers at the transport commissioner’s office in Bengaluru on Monday.

Aiyappa, however, said that government can make some changes in the Act if they find they are in the public interest.

MK Aiyappa, Karnataka Transport Commissioner There are certain provisions in the Karnataka motor vehicle rules and in the public interest government can make some changes in the permit condition. But for that the ride-sharing companies have to request and we will consider it positively and will send a recommendation to the government to take a decision on this.”

He added that there are advantages in car-pooling services and acknowledged that it will help in reducing the congestion problem and pollution in Bengaluru.

“We understand carpooling is essential in the state and we will take a positive decision on it. For that they (Ola and Uber) need to make a request we will forward it to the government,” the transport commissioner said.

Shared rides are typically 20-40 percent cheaper than personal cabs and make up a substantial chunk of the business of the two cab aggregators. An Uber spokesperson had earlier told BloombergQuint that UberPOOL constitutes more than 25 percent of its total trips in Bengaluru.

Ola and Uber did not reply to emails seeking comments.