[sustran] Ola, Uber may have to withdraw ride sharing services in Karnataka

[Vinay Baindur]

http://www.livemint.com/Companies/IAsSanOVNcvdFEW1ctJg0I/Ola-Uber-may-have-to-withdraw-ride-sharing-services-in-Karn.html


Ola, Uber may have to withdraw ride sharing services in Karnataka

Karnataka transport commissioner’s move to deem the ride sharing services
illegal is likely to impact businesses of both Ola and Uber
------------------------------
Sayan Chakraborty & Sharan PoovannA
<http://www.livemint.com/Search/Link/Author/Sayan%20Chakraborty%20&%20Sharan%20PoovannA>Sharan
Poovanna <http://www.livemint.com/Search/Link/Author/Sharan%20Poovanna>
<http://www.livemint.com/Companies/IAsSanOVNcvdFEW1ctJg0I/Ola-Uber-may-have-to-withdraw-ride-sharing-services-in-Karn.html?facet=print>
B*engaluru: *Ola and Uber may have to stop ride-sharing services in
Karnataka after the state transport commissioner deemed them to be illegal.
The move is likely to impact businesses of both Ola and Uber, given that
Bengaluru, the Karnataka capital, is one of their top three markets
alongside Delhi and Mumbai.



According to the state transport department, ride hailing services have
contract carriage permits, which do not allow them to pick up and drop
passengers during the course of the ride. Such a permit only allows for
point-to-point pick-ups and drops. The stage carriage permit, which allows
pick-ups and drop-offs along a particular route, can only be accorded to
Bangalore Metropolitan Transport Corp.








“Ride sharing is not possible because they have contract carriage permit,
which is for point-to-point drops and not picking up customers in between,”
said M.K. Aiyappa, state transport commissioner.

Aiyappa conveyed the message to drivers and representatives of the ride
hailing services at a meeting on Wednesday, called to address grievances of
drivers who have been protesting reduced incentives offered by Ola and Uber
which they claim have hit their livelihood.

The transport commissioner said another meeting with drivers and
representatives of Ola and Uber will be held on Monday, following which a
decision on the fate of ride sharing services will be taken.

“We believe UberPOOL is clearly within the law. We will continue to engage
with the transport department and Karnataka government as ridesharing
products like uberPOOL are the future of urban mobility, helping decongest
cities by getting more people into fewer cars and letting riders move
around their city more affordably. With the cost of shared rides upto 50%
less than traveling solo, response to uberPOOL in Bangalore has been
phenomenal. More than 25% of our total trips in the city are POOL trips,”
an Uber spokesperson said in an email response.

Ola did not respond to an email seeking comment.

The state transport department had forced shuttle service provider ZipGo to
halt operations in Bengaluru in December 2015 on similar grounds. The
regulator said there is no provision in the Karnataka Motor Vehicle Rules
of 1989 for services that compete with state-run city buses.

Similarly, bike taxis launched by Ola and Uber were deemed illegal by the
Karnataka government. Both companies withdrew services within a month of
launch in March 2016.

SoftBank-backed Ola (ANI Technologies Pvt. Ltd) and Uber Technologies Inc.
have struggled to comply with regulations, which the companies have
contended need to be updated to accommodate new-age products. Both
companies have drawn flak from the regulators over various issues,
especially surge pricing, whereby these companies charge consumers
multiples of the actual fare when demand exceeds supply.

States such as Maharashtra and Karnataka, among others, have come up with
guidelines to regulate these services after protests by traditional taxi
operators.

For instance, the Karnataka government notified the Karnataka On-demand
Transportation Technology Aggregator Rules 2016 on 2 April which, among
other things, made it mandatory for ride-hailing services to get a permit
before operating in the state. Uber dragged the government to the courts,
questioning its authority to frame such rules. Rival Ola got a licence in
June.

Uber also objected to some clauses in the Maharashtra City Taxi Rules 2016,
released by the state government on 15 October, saying the rules will make
operations expensive and hurt the quality of service.

<sayan.c at livemint.com?subject=Ola,%20Uber%20may%20have%20to%20withdraw%20ride%20sharing%20services%20in%20Karnataka>Sayan
Chakraborty & Sharan PoovannA
<http://www.livemint.com/Search/Link/Author/Sayan%20Chakraborty%20&%20Sharan%20PoovannA>
<sharan.p at livemint.com?subject=Ola,%20Uber%20may%20have%20to%20withdraw%20ride%20sharing%20services%20in%20Karnataka>Sharan
Poovanna <http://www.livemint.com/Search/Link/Author/Sharan%20Poovanna>