Rent-a-car operators said they have been demanding the government to regularise their business for the past few years but it has paid no heed.
"We have been fighting to legalise our rent-a-car business for the past three to four years. The government never paid attention to our demands," secretary of North Goa Rent-a-Car Association, Amir Shirodkar, said.
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Chief Minister Laxmikant Parsekar announced formation of a committee to look into the grievances, following which the strike was withdrawn.
The government had asked police and transport department to crackdown on rent-a-car and rent-a-bike business.
"Government has fallen to the pressures of the taxi owners. There is a massive crackdown due to which we have to keep our vehicles at home. Entire business has collapsed," Shirodkar said.
"We will be forced to take to streets if these crackdowns continues and our demands are not met," he added.
He said government has allowed only one company to operate rent-a-car business, which owns around 131 vehicles, while the rest of the small entrepreneurs are left to fend for themselves.
"Motor Vehicle Act, 1989 specifically allows rent-a-car business. There are such services across India but only in Goa, government is unreasonably stubborn and not allowing the regularisation due to pressure from the taxi lobby," he alleged.
As per official data, 1,500 rent-a-car operators' applications are lying with the transport department.
"All applications are in the queue. But there are over 1,000 operators illegally running the business of rent-a-car," Director of Transport Sunil Masurkar said.
He said the department has began the crackdown due to which its operations have almost come to a halt.
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