Karnataka issues a licence to Ola, as per taxi aggregator rules

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Bengaluru: The state transport department has issued a licence to cab aggregator Ola (ANI Technologies Pvt. Ltd) under the Karnataka On-Demand Transportation Technology Aggregators Rules 2016, a senior transport official said.

“We have issued licence to Ola. Now they can operate under the conditions of the rules,” said Ramegowda, state transport commissioner.

The Economic Times reported this development first on Wednesday.

The decision to grant Ola a permit comes at a time when Ola, Uber and drivers belonging to both platforms are contesting the “competence” of the state government in the Karnataka high court to regulate the cab aggregator space in the state.

However, Uber Technologies Inc. is yet to obtain a licence as it is yet to furnish all the required details, said Narendra Holkar, joint commissioner (enforcement), Karnataka transport department.

Uber did not return calls seeking comment, while Ola said it did not want to comment immediately.

India’s ministry of road transport issued guidelines for ride hailing services such as Uber and Ola, identifying them as on-demand information technology-based transportation aggregators and not taxi companies, although it is up to the states to accept or reject this, Mint reported on 14 October 2015.

On 2 April, the state government notified the on-demand cab aggregator rules, which required cab aggregators to obtain a licence under the newly formulated rules as well as a police verification of a minimum of 100 drivers to obtain a permit.

Soon after, the transport department started heavy crackdown on Ola and Uber vehicles, citing non-compliance and failure to obtain a licence.

Also Read: Won’t impound Ola, Uber cabs, says Karnataka govt

Since April this year, the state transport department has impounded at least 1,000 vehicles belonging to both Ola and Uber resulting in the companies and drivers locking horns with the state government authorities.

The on-demand aggregator rules require cabs to have digital meters capable of printing receipts, illuminated display boards reading ‘Taxi’, drivers to have working knowledge of Kannada, drivers to be residents of Karnataka for a minimum of two years and requires fares not to be higher than that fixed by the state government, among other conditions.

In its plea to the Karnataka high court on 2 June, Uber had pleaded that the state government lacks the mandate to regulate the cab aggregator space under a new set of rules which, according to Uber, is in contravention to the Motor Vehicles Act 1988, a Central legislation governing all forms of transport.

The state government has given an undertaking not to take coercive action against drivers of both Ola and Uber, while the cab aggregators have said that they will not apply surge pricing until further directions of the court.

The case is likely to be heard on 23 June.

Both Ola and Uber have maintained that they are technology platforms and do not come under the transport department.

A.S. Ponnanna, additional advocate general, Karnataka, who is appearing on behalf of the state government, told Mint in an earlier interaction that since all permits, including stage and contract carriage, were issued by the state, they have the right to regulate the sector.

He said that though Ola and Uber, among others, are app-based services, they solicit customers and require a permit to operate.