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Why we need to be kind to Uber and Ola

opinion Updated: Oct 14, 2015 23:18 IST
N Madhavan

On Tuesday, the Delhi High Court ruled that it cannot allow taxis to operate in the national capital if they did not run on compressed natural gas (CNG).(Reuters)

Two different court cases in Delhi this week, both having environmental concerns at heart, seem to be at variance in some way. And thereby hang questions on how larger public interest on the one hand and level-playing fields for private sector competitors on the other need to be reconciled in a context in which growing urban congestion has to contend with new technologies that provides opportunities to make lives better.

On Tuesday, the Delhi High Court ruled that it cannot allow taxis to operate in the national capital if they did not run on compressed natural gas (CNG). This puts a new hurdle on startup services such as Uber that are furiously expanding ,using smartphone-based apps to give quicker, cheaper services to consumers. Uber, a ride-sharing service using private cabs, has said it can replace diesel taxis with CNG cabs within six months. Ola Cabs, which uses apps to aggregate individual taxis, is already covered by such a requirement.

The high court was responding to a plea from the Association of Radio Taxis, a lobby of incumbents that include players such as Easy Cabs, Meru Cabs and Mega Cabs that have grouped to take on new rivals.

Read: Govt drafts rules to regulate Uber, other ride-hailing firms

On the face of it the ruling is fair to taxi services competing with each other as it puts the same requirement – of using the less polluting CNG – on all taxis.

However, both Ola and Uber represent technology-based efficiencies that have tremendous social benefits and public interest. By helping locate the nearest consumer for cabbies and using global positioning (GPS) systems, smartphone-based services reduce waste of fuel, and in the process help society cut back on both costs and fumes. More important, they are a new form of public transport that encourage people to cut back on use of private cars that increase congestion and pollution.

Just a day before the Delhi high court ruling, the Supreme Court ordered a green cess on commercial vehicles entering the national capital. Effective from November 1 for four months to start with, the order will punish polluting trucks – with smaller vehicles forced to pay R 700 on entry and the larger ones R 1,300.

The Supreme Court ruling is unambiguous on the larger public interest involved. If one were to take the spirit of its order and look at the longer term, a reduction or a slowdown in the number of cars and private transport vehicles running on Delhi’s roads will help reduce both congestion and pollution over a period of time.

Read: How are you operating in Delhi despite ban, HC asks Ola Cabs

The big question before courts should therefore be: how to reconcile long-term public interest with short-term ideas of a level-playing field.

Both the central government and the Delhi government need to understand that Uber and Ola represent a positive current, and fiscal incentives and administrative guidelines must make incumbent operators adopt methods similar to ride-sharing and aggregator services. Perhaps a fiscal charge on ride-sharing or aggregator services may be balanced with a suggestion that incumbent taxi operators should start using GPS apps and flexible pricing.

We could do with a level playing field that is smarter – and greener. The best of both worlds hurts no one, but policy makers need to take the game towards that goal. Creative regulation may be just what the doctor ordered, with the courts and administrations acting in harmony.

(Views expressed by the writer are personal.)