The move by Karnataka, a pioneer in making policy for new economy businesses, could have a ripple effect across other states such as Maharashtra, West Bengal and Gujarat, who are mulling rules to regulate cab aggregators. Delhi has already banned surge.
An Uber spokesperson said the company is "actively engaging" with the authorities to obtain a license. The company has one month from the date of the judgement to ready 100 cabs, the minimum requirement to obtain a license, which are compliant with the rules. "For the rest of them (cabs) to become compliant it will take a long time, but they have to do it," added Kumar.
Ola did not respond to queries sent by Business Standard.
The state government has warned that it will begin taking action against all cabs without the right permit plying on aggregator platforms such as Uber and Ola post-December 10. A similar drive of impounding cabs on the grounds of operating without licenses forced Uber to approach the High Court where it sought to quash the state's rules.
The High Court upheld most of the rules, and with respect to taxi permits it said that the All India Tourist Taxi permit allowed cabs to haul only tourists and not intra-city travellers.
Karnataka's aggregator rules state that players such as Ola and Uber must adhere to a cap on fares that is set by the government, all cabs must be fitted with panic buttons and should have either a city taxi or state taxi permit.