Karnataka hints at stricter provisions for taxi aggregators

The Karnataka government will release draft rules to regulate app-based taxi aggregators such as Uber and Ola by next week. The move comes ahead of Uber co-founder Travis Kalanick's visit to the country to attend PM Modi's 'Start-up India' event on January 16.

"We have already sent the draft rules to the law department and it is in the pipeline. It will come out in another two or three days. After the draft is finalised, we will make it as a rule and not a scheme," said Dr Ramegowda, commissioner for transport and road safety, Karnataka.

A Union government advisory last year on taxi aggregators gives states the freedom to frame their own rules.

Kalanick, who has disrupted the taxi business globally with the asset light model of Uber, is visiting India at a time when Uber has come under attack from the BJP in Maharashtra and the Congress party in Karnataka.

The Delhi government, which suspended the company's service following the rape of a woman by a driver in December 2014, is now seen as being more welcoming on the back of its agenda to get more cars off the city's roads.

Homegrown Ola, which is modelled after Uber, continues to dominate the app-based taxi aggregator space with a claimed 350,000 drivers on its platform. Uber on the other hand says it controls 40 per cent of the market with 250,000 drivers.

An Uber spokesperson declined to comment on the development, saying that the company would only do so once the draft rules were announced publicly by the Karnataka government. Ola did not respond to queries at the time of reporting.

Karnataka has indicated that taxi aggregators would be mandated to install digital meters in cars, stick to state prescribed fares and have provisions for providing printed receipts to riders. It is was seen as following in the footsteps of the Maharashtra government which had proposed similar 'restrictive' rules for players.

"We have prescribed installing GPS and other thing. Those rules and norms will come into effect, but aggregators should be registered with the motor vehicle act," added Ramegowda.

Bengaluru and Mumbai, the capitals of Karnataka and Maharashtra respectively, are among the largest markets for app-based taxi aggregators given the cosmopolitan crowd and higher penetration of smartphones. Moreover, both cities suffer from congestion, incentivising cities to use services such as Uber and Ola, and deterring them from purchasing new cars.

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