31 May 2016 13:16 IST

Ola, Uber ply on, despite Karnataka directive

(file photo) K Murali Kumar.

Government says cab firms not complying with rules notified on April 2

Despite stiff directives from the Karnataka Transport Department to immediately stop operations on Saturday, Ola and Uber are yet to send notices to their driver-partners to cease operations. So, it was business as usual on Monday for both the online cab aggregators.

The directive was on account of their refusal to comply with the State’s on-demand Transportation Technology Aggregators Rules notified on April 2.

According to the rules, web-based aggregators that have a minimum of 100 cabs in their fleet must obtain licences to operate them after a registration process and producing a set of documents, including police verification of driver partners, KYC-compliant bank accounts for drivers, passenger security measures implemented, among many others.

While Ola and Uber are in regular touch with the Transport Department to expedite the process of obtaining the licence to operate, the Transport Department says both companies have failed to submit all the required documents.

‘Bits and pieces’

“Ola and Uber are submitting documents in bits and pieces which we are currently processing.

“However, they are yet to submit complete driver antecedents and verifications. While they have submitted driver verifications for 100 cabs, their individual fleet size is over 1,000 cabs,” Ramegowda, Commissioner for Transport and Road Safety, Karnataka, told BusinessLine.

Asked what action the Department will take as both companies have not withdrawn services in Karnataka, he said, “We have seized thousands of Uber and Ola cabs over the last two months and produced them before the court where drivers had to pay a penalty to recover their vehicles. If they ply again and are caught for a second time, the penalty will be much more severe.”

A senior official in the Transport Department pointed out that cab aggregators have also failed to comply with the government norms on surge pricing where the maximum per-km fare is fixed at ₹19.50 for AC cabs and ₹14.50 for non-AC cabs. “We have received 25-30 emails from irate customers over the last two months complaining about being charged 3x to 4x in surge pricing. We also receive many calls everyday from customers who want us to intervene on their behalf to put a stop to it.”

Cyber crime

The Department is also considering getting the Cyber Crime Police Cell to freeze the taxi booking apps as their operations are illegal. However, on being contacted, the Superintendent of Police, Cyber Crime Division, CID, Bengaluru, said he has received no such request from the Department yet.

While Ola and Uber officials did not comment on their open defiance to the State government’s orders, sources said both companies have gone through the mandatory registration process, submitted necessary documents and are in the process of getting their cabs inspected by RTO officials.

Rakesh Agarwal, founder and Director of transport start-up Magic Sewa, which has an all-sedan fleet of 200 CNG taxis operating in Delhi-NCR, said, “Under Section 93 of the Motor Vehicles Act of 1988, to act as an agent for transport vehicles you need to obtain a licence. We have obtained a licence, so why can’t Uber and Ola do the same. Rules are meant to be followed, not flouted. The State government is justified in asking them to stop operations with immediate effect.”

Magic Sewa had filed a petition against the violation of government-notified fares by unlicensed app-based cab aggregators which led to the ban of surge pricing in Delhi.

“While Ola has revoked surge pricing in Delhi since April 18, when the High Court ruled in our favour, Uber has gone back to surge pricing from the first week of May stating they will use dynamic pricing that will not exceed government-notified fares, which is ₹12.50 per km for small cars and ₹23 per km for bigger cars,” Agarwal said.

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