Ban In Maharashtra: SC Refuses To Grant Relief To Rapido

After mobility startup Rapido moved the Supreme Court against its ban in Maharashtra, the apex court has refused to grant any relief to the bike-taxi startup

The top court has asked Rapido to move the Bombay High Court to challenge the notification of the Maharashtra government, dated January 19, 2023, according to media reports.

Earlier this month, the Bombay HC ordered Rapido to immediately stop operations in Maharashtra, as it did not have a taxi aggregator licence. Rapido moved the high court after the Maharashtra government refused to grant it a bike-taxi aggregator licence and filed an FIR against its founder.

As per the government resolution issued on January 19, Maharashtra government banned non-transport vehicles, including two-wheelers, three-wheelers and four-wheelers, for the ride pooling and aggregation “to ensure road safety of the general public and passengers at large.”

The Maharashtra government told the Supreme Court that it was considering a new scheme for bike-taxi aggregators in the state.

The Supreme Court has directed the Maharashtra government to take a decision on whether or not to permit bike taxi aggregators by March 31. It also observed that aggregators cannot operate without a valid licence as per a 2019 amendment to the Motor Vehicles Act.

The Pune-based startup, which has a presence in 100 cities across India, is facing legal troubles in Karnataka as well. In October 2022, the Karnataka High Court ordered Rapido, along with Uber and Ola, to shut down auto rickshaw aggregator services in the state, after it was brought to the HC’s attention that the companies were charging more than the prescribed state rates.

In October, the Karnataka Transport Department issued a notice to Uber, Ola and Rapido, asking them to cease app-based auto rickshaw services, as they were overcharging customers.

Last month, Rapido reported a 163% year-on-year (YoY) rise in its net loss to INR 439.02 Cr for the financial year 2021-22 (FY22). Its total expenses grew 1.34X YoY to INR 596.96 Cr in the fiscal year ended March 2022.

Meanwhile, revenue from operations doubled year-on-year (YoY) to INR 144.77 Cr from INR 75.61 CR in FY21. Total income generated during the period under review rose 79.5% to INR 157.94 Cr, compared to 87.96 Cr in FY21.