Cab ride aggregators Uber and Ola said that they have applied for licence to operate under new rules in Karnataka but failed to explain why the application under the new rules were not made earlier. While fresh licences are under processing by the state government, without one, both operators are effectively running their services without a licence as of Monday morning.
The new Karnataka On demand Transportation Technology Aggregators Rules 2016 came into force on April 2 this year. These Rules require businesses to hold licenses issued under the new law.
Both Ola and Uber said they have applied for a licence some two weeks ago, leaving a full five weeks between April and mid-May, when both operators were plying their services without a licence to do so.
On Saturday the Karnataka government’s Transport Department had issued a brief press note that said web-based aggregators had to obtain licences to operate cabs and taxis. “But many aggregator companies have not obtained licences but operating such cabs. This is a gross violation under Motor Vehicles Act. Hence Companies which have not obtained licences from the concerned authority should stop operations with immediate effect otherwise strict action will be taken against such operators,” according this press note.
An Uber spokesperson said that the company had applied for a licence some two weeks ago and inspection by the state authorities were carried out last week. Further paperwork is under process, said this spokesperson.
The spokespersons for both Uber and Ola did not explain why were operating in Karnataka without a licence.
Under the new rules, the state has mandated cab services to limit their charges to Rs.19.50 per km for air-conditioned cabs and Rs.14.50 for ones without it– an indirect way to curb the wide spread practice of “surge pricing” by app-based cab aggregators. A similar situation was faced in Delhi, when the Arvind Kejriwal-government had come down on surge pricing in the state that had forced Ola and Uber to pull back this controversial policy.