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Is it end of road for ride-sharing by Uber and Ola, over safety, legality debate?

Cab hailing companies might face tough times ahead as state governments are contemplating ban its ride-sharing services such as UberPOOL and Ola Share, calling it “illegal” and raising questions on safety of such services.

business Updated: Feb 07, 2017 13:30 IST
Sunny Sen
Uber CEO Travis Kalanick speaks to students during an interaction at the Indian Institute of Technology (IIT) campus in Mumbai.
Uber CEO Travis Kalanick speaks to students during an interaction at the Indian Institute of Technology (IIT) campus in Mumbai.(Reuters)

Rideshare, which allows two or more people going in the same direction to use one cab, might be a good concept, but when did a good concept come in the way of law?

It has in the case of cab aggregators Ola and its American rival Uber.

Transport department officials in Delhi and Karnataka are contemplating banning services such as UberPOOL and Ola Share, which both the companies claim help decongest cities. The government said the service is “illegal”.

If the ban is implemented, it might be just the beginning of the end of the road for ride-sharing in India.

“It sets precedence for a nationwide ban ... Even though it is economical for the riders, but it is a security concern,” said Amit Kaushik, managing director (India) at Detroit-headquartered consultancy firm Urban Science.

There is a good potential that other states might follow. “Security concerns” are a big problem, and these “services should be restricted if regulations are not in place,” Kaushik added.

Who cares about regulations as long as the money flows in?

Cab-hailing companies have a hook to attract customers. Under UberPOOL and Ola Share, users pay 30% to 50% less depending on the demand and time of their ride. In some cases, a shared travel is less expensive than an auto rickshaw ride.

But, in a country where fake identity proofs are so common, allowing strangers to share rides can be risky. That is the government’s concern, too.

“If an unforeseen incident happens during a shared ride, all fingers will be pointed at the government,” a Delhi transport ministry official told Hindustan Times.

According to the law, the ride-hailing companies are allowed to pick up passengers from one location and drop them to at another location. However, they can’t change the route to pick up other passengers midway.

Delhi government officials told HT that the companies are “violating the permit norms”, and are introducing more variants of ride-share.

For both Ola and Uber, ride-sharing is the new battleground and future of commercial transportation. Uber’s desperation was visible when it decided to go against the government to continue with its ride-sharing services in Bengaluru.

Uber’s general manager Christian Freese said that the firm had not received any notice from the government and so it won’t take down the service. Soon after, the government in Karnataka has given a 15-day extension to Uber and Ola to carry on with the ride-sharing service amid a lot of uncertainty.

“When an Indian company goes to the US, it follows the law of the land. You can debate with the government, but you can’t dictate the government,” Sanchit Vir Gogia, founder and chief analyst at Greyhound Research, said.

POOL and Share have also been opposed by drivers’ unions in Karnataka as they complained that it has brought down incentives of drivers. as customers are charged less when they hail a shared ride.

While both Ola and Uber continued to talk about “ease of use”, “lower prices”, and “decongesting cities”, they do not take responsibility for the passenger’s safety. The companies do guarantee passenger safety even after the rider has boarded the cab.

Incidents of rape and molestation have never stopped doing the rounds with cab-hailing companies. “Women safety can’t be jeopardised. The government is not wrong...,” Gogia said.