US-based ride hailing service, Uber, plans to invest Rs 99 crore in Karnataka, seeking concessions from the state government under the Information Technology Act. While the government has cleared the project, it has asked Uber to comply with state rules, including the soon-to-be-announced app-based taxi aggregator law. Uber’s investment in the state will be directed towards expansion of its service and setting up of its first development center in the country at Bengaluru.
It has sought concessions in the form of "on-demand taxi aggregator regulations", "ridesharing pilot and regulations" and "concessions on water and electricity".The state ministry of transport and road safety had opposed the move stating that the framing of the rules to regulate companies such as Uber and Ola was still in the works. The IT ministry had also reached out the BWSSB, BESCOM and KSPCB, apart from the transport department. “..the transport department is in the process of framing City Taxi Scheme 2015 under the section 39 of the MV Act 1988 for the aggregators in the state. Hence the question of implementation under the IT Act does not arise," said Dr. Ramegowda, commissioner of the state transport department, in a letter to the state dated September 29, 2015. Uber proposes to grow its base of driver partners from 15,000 to 1,00,000 in the state, and also increase its full-time employee strength to 200 people from 15 currently, who will develop local features and services for its platform in the country. Karnataka will become the first state to regulate app-based taxi aggregators in India with a set of rules that will be announced sometime next week, according to Ramegowda. Uber has gained clearance at a time when company co-founder and CEO, Travis Kalanick said that the company could double its investment of $1 billion in India if it sees five times the returns, while addressing a gathering at the Indian Institute of Technology (IIT) in Mumbai yesterday.