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Ola, Uber To Be Legalised As Government Plans To Draft Regulatory Norms

Ola, Uber To Be Legalised As Government Plans To Draft Regulatory Norms

The future of online cab hailing platforms in India like Ola and Uber seems to be in the clear as the Government plans to issue guidelines for their legalisation, according to a source close to the matter.

For the legalisation to be put in place, the cab aggregators will be required to get the software used for calculation of fares validated by the authorities, while keeping the luxury cars segment outside of the tariff regulations, said the source, requesting anonymity.

Commenting upon the pace of the upcoming developments, the source added that a court affidavit can be filed in Delhi as soon as by the upcoming week, to provide consistent regulations for startups and traditional taxi operators. The proposed rules will address the issue of surge pricing indirectly by issuing fare calculators, it added.

As per an official statement, the Government intends market dynamics to control the fares for the luxury cabs categories of Uber and Ola, rather than having them governed by the tariff regime fixed by the State Government and other regulatory authorities. For this, the Government plans to file the affidavit latest by mid-December.

The Ministry of Road Transport and Highways has confirmed the development and the deadline for next month to officially file the policy, as per a report by Mint. It has added that the policy would be citizen -focussed.

Uber declined to comment on the development and Inc42 was awaiting responses from Ola at the time of publication.

The lack of a clear regulatory framework in the past had let to a continuous ongoing clash between the companies and the State and central authorities. In July, the Delhi Autorickshaw Sangh and Delhi Pradesh Taxi Union called for an indefinite strike against app-based taxi services in New Delhi. In August, the Delhi High Court issued a notice to Ola and Uber to stop surge pricing and follow government prescribed fares. It had set August 22 as the deadline for app-based cab aggregators to completely withdraw surge pricing.

In September this year, reports surfaced that the Indian Government is reportedly planning to establish a maximum limit on fares to monitor surge pricing by online cab aggregators like Uber and Ola.

Earlier last month, the Maharashtra government released the draft of Maharashtra City Taxi Rules, 2016. In this regard, cab aggregator Uber raised an objection to Maharashtra’s draft rules to regulate ride-hailing apps on three fronts, the proposed restrictions on engine capacity, price tags for permits, and pricing.

Earlier too this month, the Karnataka High Court dismissed Uber’s request to scuttle the Karnataka On-demand Transportation Technology Aggregators Rule, 2016, while upholding the government’s rights, ruled in favour of the State Government. Following that, more than 12,000 Ola and Uber drivers went on a strike against the reduced incentives by the companies.