Karnataka Govt orders Ola, Uber to get license or cease operations

The trouble of Ola and Uber does not seem to end anytime soon; this time, they have landed into a problem with the Karnataka government. The authorities have issued a notice to all the app-based taxi aggregators to cease their operations if they have not yet obtained the license.

Karnataka transport department issued a statement on Saturday which stated: “Companies which have not obtained licenses from the concerned authority should stop operations with immediate effect.” This new was implemented in the state in April to keep the app-based taxi aggregators in regulation.

As per the report in Business Standard, the fare that has been set by the Karnataka government is Rs 19.50 per km for air-conditioned taxi and Rs. 14.50 for others. The fare regulation has not been approved by the cab drivers as they have already complained of harassment by the transport department officials. The drivers also protested last Saturday as they felt that the administration was targeting them instead of the companies.

The Transportation Technology Aggregator Rules 2016 led down by Karnataka states:

No person shall act or permit any other person to act as an aggregator unless he holds an effective license issued to him under these rules.

This rule clearly means that no passenger can be charged more than the fare fixed by the government. Other than this, Karnataka State Transport department also puts restrictions on bike services launched recently.

If we look at the current notice that has been issued by the authorities, this will have a very severe effect on Ola and Uber business in the state. Also the fact remains that Bengaluru is one of the cab-aggregator biggest markets in the country. Even though this ban is temporary, it will undoubtedly affect the economy of app-based taxi operators, creating havoc in a congested city like Bengaluru.

Recently, Uber suffered a fracas in the capital because of Kejriwal Government proposal to cap tariffs in the city.