comscore Uber, Ola could be penalized up to Rs 1 lakh for violating licencing conditions: Motor Vehicle (Amendment) Bill 2016
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Uber, Ola could be penalized up to Rs 1 lakh for violating licencing conditions: Motor Vehicle (Amendment) Bill 2016

The government has set penalty for the likes of Ola and Uber for violating the new Motor Vehicle Act. With the lack of clarity in such licencing laws and other regulatory laws, the authorities could misuse it to impose hefty penalties.

ola-cabs

The Union cabinet has cleared the Motor Vehicle (Amendment) Bill 2016 that brings taxi aggregators like Ola Cabs and Uber under its purview. Without elaborating much, the amended law says that these aggregators will be slapped with Rs 25,000 to Rs 1,00,000 for violations of licencing conditions. Ola Cabs has declined to comment on the amendment. BGR India has also reached out to Uber for response. Also Read - Ola to offer free oxygen concentrators to the needy

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The amendment comes at a time when various state governments in India are cracking down on the app-based taxi services by bringing new road laws. Karnataka, one of the first state governments to do so, had introduced the Transportation Technology Aggregators Rules. The law makes it mandatory for such service providers for obtaining a licence before operating in the city. While the standoff between the Karnataka government and the taxi service providers continues, Ola Cabs last month secured the mandatory licence. It is likely that other taxi service providers will also follow suit.

In Delhi, Ola has also applied for a city taxi licence to the state transport department. To be eligible for the city taxi licence, the applicant can register up to only 2,500 cars, and should have taxi meters, fare regulation and GPS devices installed. The city taxi scheme also includes a fixed fare, a point wherein taxi aggregators have already locked horns with the state government. After a brief halt during the odd-even days, Uber and Ola both have restored the controversial surge price.

ALSO READ: Uber to sell China business to arch rivals Didi Chuxing for around $35 billion: Report

Ambiguous law, concrete penalty

As mentioned earlier, the law doesn t elaborate much on how these app-based taxi service providers should function, but already has penalties in place. Also, the law doesn t comment on the lack of uniformity of state licensing laws. There are possibilities that state governments can misuse the Union law to trouble these app based taxi services and drivers in particular, as they have done in the past.

It may be recalled that the Karnataka authorities had started to impound the Ola and Uber tax for operating without licences. According to a report, about 1,000 cabs were impounded and later released on payment of fines. Later, the government had assured it won t be seizing the vehicle, but reiterated crackdown against surge pricing.

In Delhi too the state government had cracked down on Ola and Uber for violating its directive not to charge surge pricing during the odd-even days. In April, the state authorities impounded more than 50 vehicles by app-based taxi aggregators for charging fares more than the prescribed rates during that period.

It is not clear whether aggregators like Ola and Uber would be fined or the drivers whose car gets caught during periods when governments decide to go after these companies. Precedence has it that it is the drivers who have to bear most of the brunt as their cars are impounded.

Without any clear laws for taxi aggregators, who claim they shouldn’t come under taxi operators since they only connect taxis with riders, this new law is likely to become another battleground between state governments and these companies.

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  • Published Date: August 4, 2016 7:15 PM IST
  • Updated Date: August 4, 2016 7:20 PM IST



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