App-based shuttle bus service ZipGo has yet again suspended its service in Bengaluru after the Karnataka transport department cracked down on it for not having the right permit to operate in the state.
ZipGo functions in the same space as the Bangalore Metropolitan Transport Corporation (BMTC) and could be seen as competition by the state-run entity. The company whose office was raised by transport department officials in December for the same reason, has apparently been advised to suspend services before pursuing for a permit to ply on roads.
“They are operating illegally. They have to obtain a permit, a stage carriage permit, but they won’t get it here because it’s the same area as the BMTC. Because of this they can’t operate,” said Ramegowda, Karnataka’s commissioner for transport and road safety.
ZipGo recently launched its shuttle bus service to the Kempegowda International Airport (KIA) from 14 points across the city at a rate of Rs 149. The BMTC which runs a similar service charges passengers upwards of Rs 170.
Karnataka, despite being the startup capital of India, has been seen as framing backward rules for the governance of startups in the e-commerce and mobility space. The case between Amazon India and the state authorities over tax issues has dragged on for over 18 months now.
Unfavourable policy has already lost the state business, with Flipkart choosing Telangana over Karnataka to set up its largest sorting facility in the country. An upcoming taxi aggregator policy too is seen as archaic as it could propose services such as Uber and Ola fit meters in taxi’s signed up with them and stick to state-regulated fares.
Speaking to Business Standard in December, Jitender Sharma, co-founder of ZipGo had taken a very positive outlook despite the services of his company being suspended. "I do not believe that the government's intention is to hurt innovation, nor do start-ups intend to break the law. But regulations often lag behind innovation. It takes discussions and time to find the balance between the need for accountability and commercial viability," he had said.
Sharma could not be reached for comment at the time of reporting.