Karnataka, which hosts India’s Silicon Valley, Bengaluru, has asked taxi aggregators Ola and Uber to halt operations immediately. Contrary to what many may think, it is not a knee-jerk move of the state government. Asking them to halt operations is the outcome of the implementation of the Karnataka On-demand Transportation Technology Aggregators Rules, 2016 which was notified by the Government of Karnataka on 2 April 2016. States have been given the power by the Union Government to frame their own rules for taxi aggregators and Karnataka was one of the earliest to do the same.



What that effectively means is that the states have a choice but the consumer has none. The states can allow taxi aggregators to operate to ease commuting in its cities or they can choose to frame regulations to outlaw these app-based aggregators and make the lives of thousands of commuters difficult.

The Karnataka Aggregators Rules, 2016 was introduced with a familiar form of reasoning- ‘levelling the playing field for regular taxi operators and cab aggregators.’



Ola and Uber have a superior quality of service than regular on-demand taxi operators. The Karnataka government, however, has now ensured that a level playing field among these two types of services is maintained by ensuring consumers have uniformly inferior quality of service.



When one reads the rules, it becomes clear why they haven’t been followed by Uber and Ola thus resulting in the state government asking them to cease operating. Here are some of them (paraphrased In bold italics)-

1. ‘The fare including other changes, if any, shall not be higher than the fare fixed by the Government from time to time.’ Price control here too. The reason Ola and Uber have become so popular is the convenience (at a price). Control these prices and these aggregators become just like the auto-rickshaws. Instead of allowing autos and regular taxis the freedom to ply at market decided fares, the government has fixed prices of these app-based aggregators. What a twisted way to level the field!

2. ‘Be capable of being tracked continuously with GPS/GPRS facility with a provision of a panic button for the use of the passengers, capable of alerting the control room of aggregator as well as local police without any hindrance or interference by the driver.’ Again, lots of fancy things which other taxi operators need not have. What happened to ‘a level playing field’ ? Uber already has a ‘SOS’ option on it’s app. Why does the Karnataka Government want to force upon drivers and commuters extra burden and cost?

3. ‘The driver shall not be allowed to work beyond the maximum number of hours as stipulated under Motor Transport Workers Act 1961’. The maximum hours allowed under the act is eight hours in any day and forty-eight hours in any week. This is one of the truly astounding parts. Given Bengaluru’s traffic, 8 hours a day would mean a maximum of 5-6 rides (I’m being optimistic here). The ensuing reduction in supply would only increase the market fares for taxi services. In the long term, the reduction in earnings would mean lesser number of drivers entering the market. It nullifies one of the best parts of the app services : high labour flexibility.

4. ‘ Be fitted with single integrated GPS / GPRS capable vehicle tracking unit with printer, display panel and digital fare meter’ The app won’t be enough. The government wants you to see your fare on a tamper-proof metre too. Google maps won’t do.



5. ‘ (digital metres) capable of generating a printed receipt to be given to the passengers’ . The fares appearing on your app are not sufficient. The fares need to be informed through printed receipts.

6. ‘Be fitted with an yellow coloured display board with words “Taxi” visible both from the front and the rear. The board shall be capable of being illuminated during the night hours.’ I wonder what is this for?: Increase the ease with which the police can extort taxi drivers?

7. ‘Ensure adequate mechanism for receiving passenger’s feedback and grievances. This may be ensured through feedback register kept in the taxi, easily accessible to the - passengers always and also by providing toll free phone numbers.’ Commuters rating taxis on their app won’t be enough. The government wants you to be able to write them in a register.

The Karnataka Government might be using such orders to tame these taxi aggregators into following the rules it introduced in February. The bureaucrats probably think that like any other business in India, these fellows too will be tamed. They most probably are mistaken. When ‘progressive’ and tech savvy Austin in Texas, USA did something similar through a referendum , Uber promptly suspended it’s operations . Those who suffered were the commuters. Karnataka won’t be different. Telangana Minister KT Rama Rao has been trying to pull companies from Bengaluru into Hyderabad. He should relax. Karnataka Chief Minister Siddaramiah is doing that job and then some.



One can only pray for the well being of the thousands of Uber and Ola drivers who have taken huge loans to buy their livelihood (taxis).

