Delhi Government’s Decision to app based shared taxis

Just about the time when the convenience in travelling in Delhi was starting to become a bit better, the Delhi Government, on 6^Th Feb 2017, announced that it is all set to ban all shared rides provided by the app-based cab providers. Uber, and its major rival on the home front, Ola, took a huge hit as soon as the Delhi Government made this announcement on Monday, following the footsteps of the Karnataka government which banned the ride-sharing services provided by these companies, namely UberPool and OlaShare on 30^th Jan 2017. The Karnataka Government termed these shared-ride services as “illegal” invoking provisions of the Motor Vehicles Act 1988 and Karnataka On-Demand Transportation Technology Aggregators Rule, 2016.

The Delhi Government is planning to start dialogues with the Centre on this issue. The major reason for this step from the side of the Delhi Government is the safety concerns of the public during the course of the shared ride. Even though they agree that car pooling services actually helps in curbing pollution and reduction in road congestion, but these services are not operating within the law. So the Delhi government will raise the proposition to amend the Motor Vehicles Act 1988 at the earliest.

What are the Concerns for such Ban?

Legal problems

Violation of Contract Carriage Permit Conditions

As per the conditions of a ‘contract carriage permit’ license in India, the app based cab service drivers are allowed to pick up customers from one location and drop them at an agreed upon destination. They are not allowed to take on board customers from more than one destination while travelling towards a particular destination. In other words, they are not allowed to pool customers travelling to different locations at the same time. But this rule is being increasingly violated when a single cab is being allowed to share by 4 different people who might board the cab from 4 different locations and their respective drop locations can also be different. The cab driver is making multiple stops, picking up different customers, while being en route to the destination of another customer. The cab-sharing facility comes under the “stage carriage permit”, which these cab drivers don’t have. So basically the cab drivers for these app-based cab service providers are using the facilities entitled only under “stage carriage permit” when what they actually possess is “contract carriage permit”. Most of the new facilities that these companies-Ola and Uber are introducing do not have the sanctions of the government are being done in a covert manner.

Surge Pricing

At the time of odd-even scheme in Delhi, the Delhi Government had issued an order for capping cab fares. But the cab service providers continued to practice surge pricing- a form of pricing in which the prices could be increased depending on the supply of cabs on the roads and on travelling time. Then the Delhi Government approached the High Court on this, which also imposed a ban on surge pricing. But it somehow continued until the government threatened to impound their licenses. In Karnataka these services were banned for renewing surge pricing. The same is now being claimed in Delhi also.

Violation of Delhi Taxi Rules

It is alleged that the Uber and Ola are also violating the Delhi Taxi Rules by charging Rs 40 for the first two kms, while the base fare for an economy cab is Rs 25 and that of a sedan is Rs 65 for the first km.

Violation of clean fuel norms

By virtue of the CNG case the use of clean fuel was made mandatory for all state vehicles in Delhi by the Supreme Court. The only exemptions were given to the tourist vehicles with All-India Permit. However, Uber cabs do not have an All India Permit but they continue to violate the clean fuel norms.

Violation of Radio Taxi Scheme 2006

The Radio Taxi Association has complained against Ola and Uber violating the scheme by not following the pricing and licensing norms set by it. But this contention has been refuted by these service providers considering themselves as not radio taxis.

Social problems

Loss to radio taxis

If these app based service providers continue to provide their services at 50% of the usual fares and introduce other similar discounts to attract the passengers, a huge loss will be caused to the state radio taxis. They will be forced to bring down the prices to a very great extent although it is not feasible for them. The norms also don’t allow them to reduce the fares to this extent. So it is creating an anti-competitive situation.

Safety issues

These cabs are ferrying multiple passengers against the permit norms. So, along with being illegal they raise concerns of safety of the travelling passengers. This concern can also be raised on the backdrop of an incident when an executive was raped while returning in a Uber cab. It drew a lot of criticisms towards these apps. There was also a PIL filed in the Delhi HC on this matter and the apps were also blocked by the Department of Electronic and Information Technology (DEITY).

How can the Government bring about the ban?

It is easy to issue a notification for banning these services, but ensuring compliance with the ban is a very difficult task. There are about 45,000 to 50,000 such cabs running in the city and monitoring each of them is tough.

Why is banning not a good option?

For the daily commuters, these app based cab services have become a lifeline. They can be relied upon at the time of lack of public transport, especially during the time of the night. In other words, these services have made commuting at any time from any place to any place a reality. So banning them will now have serious implications. These include:

• Impact on consumers– The consumers of these services were receiving cab services at a very reasonable cost during all hours. It had made travelling a lot easier and cheaper. In a city like Delhi it is quite obvious that having access to public transport is not an easy task. It has been alleged that the government which had been using taxpayers’ money to promote these services cannot put a ban on them. There are charges being put of bureaucratic corruption.
• Pollution problems-It is being claimed that these cabs do not follow the clean fuel norms, adding to pollution in the city. But their ban will only lead to an increase in pollution. If these services are stopped, it is quite obvious that people will not avail public transport all the time. They will be forced to take out their own transport which will increase the number of vehicles on the road leading to greater pollution.
• Rather, the idea of pool car being practiced by them should be promoted as being environment friendly.
• Safety issues– The question of safety cannot be addressed by merely stopping the operation of pool cabs. There are other ways in which safety is at risk also, like the infamous Delhi gangrape in the year 2012, which took place in a bus (a public transport). So, instead mechanisms should be adopted and the law should be amended to regulate these cab sharing services and impose strict norms and monitoring.

Conclusion

From the above analysis, it is clear that the main allegations against these service providers is concerning their violation of certain rules and conditions which have all come by virtue of the Motor Vehicles Act, 1988. In fact, the government had also proposed amendment in the Motor Vehicles Act to make the regulations clear.

It is also another side of the story that the laws are so unclear that no prima facie violations can be inferred by these service providers. A lot of in-depth analysis is required for that, which again leaves enough space for arguments. This is the reason why Uber particularly has denied all claims and has decided to move to Court against the ban. They too claim the ban to be illegal and that they were banned without being informed. Thus, the first step is to amend our laws to make them consumer friendly as well as serve the needs of the society. Only then can the acts of such service providers be challenged.