Karnataka High Court asks state govt, Ola and Uber to reach a consensus

Ola and Uber moved the court challenging an order issued by the State Transport Department effectively banning auto-rickshaw rides through their apps, following multiple complaints of overcharging

The Karnataka High Court has asked the state government to meet cab aggregators Ola and Uber to try and reach an understanding on the fare to be charged for autorickshaw services through their apps.

Justice MGS Kamal issued the direction on Friday related to the petitions by ANI Technologies (owner of Ola) and Uber. Ola and Uber moved the court challenging an order issued by the State Transport Department effectively banning auto-rickshaw rides through their apps. Karnataka government made such services illegal from Wednesday, following multiple complaints of overcharging.

The High Court said that the government can't just ban the aggregators with coercive steps just like that, according to the sources. It gave 15 days to government regulators and cab aggregators to work out a fare pricing mechanism.

The transport department pointed out that there is no scope for the mobility players to offer autorickshaw services on their platform under the Karnataka On-Demand Transportation Technology Aggregators Rule (KOTTAR), 2016. They were asked to give a fresh application to resume autorickshaw services. According to the rules, the aggregators are given licences to provide taxi services only -- taxi means a motor cab having a seating capacity not exceeding six passengers, excluding the driver, with public service permit on contract.

However, the High Court said that ban is not required on these services and the rules include the definition of auto-rickshaw services. But it recognised the need for the booking fee. The High Court said in the interim, while the transport department comes back with the fare pricing mechanism, the companies can charge 10 per cent of the base fare.

However Uber said that commission caps threaten the viability of this vibrant e-hailing sector, which will impact the tens of thousands of auto drivers who rely on it for their livelihoods and will result in the shrinking of this fledgling category. 

“We welcome the court order, which recognises that auto drivers have the right to operate using aggregator platforms. It also recognizes that platforms like Uber can charge a booking fee, which allows them to cover their costs and continue to provide their services,” said an Uber spokesperson on Friday. “E-hailing autos are thriving in Bengaluru because of the value it brings to drivers and riders, who prefer it because of the upfront pricing, the lack of haggling and the safety features that come with the app.”

Earlier Uber and Ola had told the government that they have complied with the rules and reduced their minimum auto fare for the first two km back to Rs 30. Interestingly, Uber, Ola and Rapido are now also informing customers about the base fare and the convenience fee that they are charging. These players have already reduced the convenience fee from Rs 40 to Rs 20-Rs 30, according to the sources.

“We will continue to engage with the government to find ways of regulating the sector in a way that allows for riders, drivers and platforms to benefit from technology that has truly transformed urban mobility,” said the Uber spokesperson.

The Karnataka government had warned app cab aggregators that it would be imposing a fine of Rs 5,000 on vehicles found operating illegally.No action will be taken against the autorickshaws and only the firms found to be aggregating them will have to pay penalties. The transport department had even said that it will write to cyber division to stop auto rickshaw services because it cannot do it directly.