Karnataka Traffic Department Declares Ola, Uber, Rapido Autos "Illegal"

The Karnataka government is again in headlines due to its recent declaration of App-based cab and bike aggregators as “illegal”. Services from major names in the industry like Ola, Uber, and Rapido have been barred under this order. An order has been passed by the Karnataka transport department order calling autos services provided by these ride-hailing platform companies “illegal”.

Reason behind This Order

Auto services by the cab aggregators are declared as ‘illegal’ under On-Demand Transportation Technology Act 2016. Several commuters have filed complaints with the transport department over Ola and Uber charging a minimum of INR 100 even if the distance is less than two kilometres, according to the transport department. The minimum auto rate in Bengaluru is INR 30 for the first 2 kilometres and INR 15 for each subsequent kilometre. Vehicle aggregators have been asked to produce a report.

"The aggregators are providing auto rickshaw services in violation of the above regulations. Also, it has come to the notice of the department that customers are being charged higher rates than the rates fixed by the government," the letter added.

THM Kumar, the state's transportation commissioner, stated that these companies have been awarded licences to operate solely taxis under the Karnataka On-Demand Transportation Technology Aggregators Rules, 2016. Autos are exempt from the regulations.

On September 9, the Competition Commission of India (CCI) issued a warning and requested Indian Cab Aggregators (CAs) such as Ola, Uber, and Meru to develop clear and open regulations regarding the sharing of money from surge pricing between drivers and CAs.

According to the department's warning, ride-hailing businesses must suspend their vehicle services as soon as possible and not charge customers in taxis more than the government-mandated fare. The agency also threatened them with legal action if they did not comply with the directive.