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Why did Delhi governments ban Ola, Uber and Rapido bike taxi services?

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Why did Delhi governments ban Ola, Uber and Rapido bike taxi services?

As of my knowledge in September 2021, the Delhi government did not ban Ola, Uber, and Rapido bike taxi services. However, there have been some instances in the past where the Delhi government has taken action against these ride-hailing services.


In 2016, the Delhi government had banned surge pricing by Ola and Uber, which resulted in a brief strike by drivers of these companies. The government had also impounded the vehicles of some drivers for allegedly operating without valid permits. In 2019, the Delhi government had issued notices to Ola and Uber for not complying with the city's ban on diesel vehicles, and had impounded several diesel-run taxis.


As for Rapido, which is a bike taxi service, it has faced regulatory challenges in several states in India. In Delhi, Rapido had reportedly been operating without the required licence, and the Delhi government had issued a notice to the company in 2019 for violating the Motor Vehicles Act 1988.


It is worth nothing that the regulatory environment for ride-hailing and bike taxi services in India is still evolving, and there have been ongoing discussions and debates around issues such as safety, licensing, and pricing.


What has happened?


In a major setback to ride sharing platforms OLA, UBER, and RAPIDO, the Delhi transport department on 20 February 2023 issued a public notice to stop plying their taxi services immediately.


The transport department of delhi had earlier cautioned bike taxis against plying on the roads of delhi, warning that it was a violation of the motor vehicles  Act 1988. That would make aggregators liable for a fine of rupees one lakh.



But why?


It has been brought to the notice that two- wheelers having non-transports (private) registration  marks/ numbers or being used.


To carry passengers on hire which is purely commercial operation and a violation of the motor vehicle Act 1988, the transport department said in the notice.



Punishment


The transport department also highlighted that violation of this will result in a punishment of first offence of Rs 5000/- or subsequent offence will attract a fine of Rs 10,000/- and imprisonment.

In addition, the driver's licence will be suspended for a minimum period of three years, the notice said clearly.

Those facilitating this operation will be charged the fine of Rs 1 lakh under the motor vehicles Act 1988.



Impact

Incidentally, bike taxis are a popular mode of transportation in Delhi due to lower prices, easy manoeuvrability and capacity for last-mile connectivity.


However, Delhi transport department officials noted that the transport department ‌ has to consider the services from a safety point of view. 


In Delhi, the transport department grants passenger service vehicle badges to commercial drivers after verification. After the driver is verified, the vehicles receive yellow number plates that means you are travelling with a safe and verified driver.



Significance


Earlier this  month, the Supreme Court refused to grant relief to bike taxi aggregator Rapido against the Maharashtra government's refusal to grant a licence to it.


A bench headed by chief justice D.Y. Chandrachud said the amendments made to the motor vehicle act in 2019 clearly state that without a valid driving licence  aggregator cannot operate.


The bench, also comprising justices P.S. Narasimha and J.B. Pardiwala, marked that the Pune RTO had rejected the company’s plea for licence in December 2022.


Rapido moved the supreme court against the Bombay high court order which declined to entertain its plea against the state government’s refusal to grant a two-wheeler bike taxi aggregator licence to the company.


The supreme court allowed liberty to the company to move the high court to file the plea 19 January 2023 notification issued by Maharashtra, and also asked the high court to examine whether it was uninfluenced by the earlier order.


But why is the state government ‌not giving licences?


The state government had said there was no policy on licensing ‌ bike taxis and there was no fare structure policy, providing statistics, the 7 year-old Rapido put a point that there are more than 200,000 bike captains and 120,000+ auto-rickshaw captains in state Maharashtra.


‌Rapido caters to around 220,000 customers daily through nearly 87,000 rids presently operating in Mumbai and pune.


But why state government ‌does not give a licence to ola, Uber, and Rapido bikes taxis service 


The decision to grant licences to companies like Ola, Uber, and Rapido for bike taxi services is generally within the purview of state governments. The reasons why some state governments might choose not to grant licences to these companies for bike taxi services can vary depending on the specific circumstances of each state. Here are some possible reasons why a state government might choose not to grant licences:


Lack of regulatory framework: Some state governments may not have a clear regulatory framework for bike taxi services. This can lead to concerns about safety, insurance, and liability, which could make it difficult for the government to grant licences.


Opposition from traditional taxi services: Traditional taxi services may view bike taxi services as competition and lobby the government to restrict or ban them. This can be a powerful political force in some states.


Infrastructure concerns: Bike taxi services may be seen as putting additional strain on roads and infrastructure, which could lead to congestion and safety issues.


Public safety concerns: Some state governments may have concerns about the safety of passengers using bike taxi services, particularly in areas with high rates of accidents.


Legal challenges: In some cases, legal challenges may be made against bike taxi services, which could make it difficult for the government to grant licences until the legal issues have been resolved.


It's worth noting that while some states may not grant licences to bike taxi services, others have embraced them and have put in place clear regulations to ensure their safe operation. Ultimately, the decision to grant licences will depend on a range of factors, including the legal and regulatory environment in each state, as well as the views of policymakers and the public.



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