File illustration picture showing the logo of car-sharing service app Uber on a smartphone next to the picture of an official German taxi sign in Frankfurt, September 15, 2014. A Frankfurt court earlier this month instituted a temporary injunction against Uber from offering car-sharing services across Germany. San Francisco-based Uber, which allows users to summon taxi-like services on their smartphones, offers two main services, Uber, its classic low-cost, limousine pick-up service, and Uberpop, a newer ride-sharing service, which connects private drivers to passengers – an established practice in Germany that nonetheless operates in a legal grey area of rules governing commercial transportation. REUTERS/Kai Pfaffenbach/Files (GERMANY – Tags: BUSINESS EMPLOYMENT CRIME LAW TRANSPORT)

After months of legal battles, there seems to be some sort of relief for the likes of Uber and Ola. Indian Government, in its first such steps towards legalising these services, has now issued guidelines for cab hailing service providers like Uber and Ola, and identifies them as on-demand information technology based transportation aggregator instead of taxi company.

The transport ministry has asked states to ensure that the companies operate with call centres and their taxis follow emission norms, according to a six-page advisory issued last week.

However, it is up to the state governments to accept or reject these guidelines. These cab hailing companies have been claiming that they are not a taxi company but an IT company whose app connects passengers with drivers.

As per the guidelines, the aggregators must not own or lease any vehicle, employ any drivers or represent themselves as a taxi service, unless the company is also registered as taxi operator. Also, taxi operators have to maintain a minimum fleet size, office space and parking space for all taxis.

It also calls for extensive background checks of drivers to ensure safety of the passenger. Any person who has been convicted of any “cognizable offence” under criminal laws in the past should not be allowed to become a driver.

The regulations comes as a relief to Uber and Ola, however they may still face some operational hurdles. The regulations mandate that the drivers on the platforms must be permitted to log in or out of the network whenever they want. Also, the drivers cannot be prevented from operating on multiple platforms.

In a statement sent to us, Ola said,

We welcome the advisory from the Ministry of Road Transport and we believe this is a major step towards positively impacting the ecosystem and its stakeholders, that technology platforms like ours have created. We will continue to work with the government, under the aegis of this progressive directive, offering our complete support and commitment towards building mobility for a billion people

Also, companies cannot impose a minimum number of work hours for the drivers, but they must follow rules for maximum hours of safe driving. This may not be an issue as not Uber nor Ola has minimum working hours requirement or restriction to work with other platform.

Since December 2014, many state governments have tried to ban  cab hailing service providers and forced them to register as taxi operators. Also, there was confusion whether drivers can use diesel cars in cities such as New Delhi where all local taxis have to use CNG.

State Governments, like the Karnataka Government, are already in the process of drafting a separate policy for such companies, and will release the same next week based on the interest of the state.

We are currently consulting all stakeholders and legal departments, and the final draft will be out within the next one week.

said H.G. Kumar, Additional Commissioner for Transport and Secretary, State Transport Authority, in Bengaluru.

The Maharashtra government has already issued a City Taxi Scheme 2015. The regulations states that licensees should maintain a fleet of a minimum 1,000 and a maximum of 4,000 taxis. This limit for maximum number of taxis may restrict the businesses to scale up.


Here’s an official statement, which we just received from Uber’s India President, Amit Jain,

The guidelines are a significant step in the right direction. They rightfully distinguish between taxi operators and technology platforms, and lay down sector specific regulations for our industry. We applaud the MoRT&H for holding a stakeholder consultation to develop these guidelines and are pleased to have participated in this process.

Leave a Reply

Your email address will not be published. Required fields are marked *