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Taxi Wars Hit A New Low: Ola Lashes Out At Uber For Being A Foreign Firm With No Regard For Indian Laws

Taxi Wars Hit A New Low: Ola Lashes Out At Uber For Being A Foreign Firm With No Regard For Indian Laws

Taking their rivalry to a new low altogether, Ola has accused Uber of being a foreign firm with no regard for Indian laws and doing business in India only for profit.

An ET report states how Ola has defended Karnataka’s new regulations governing tech-based cab hailing services, and at the same time accused Uber India of flouting all norms. In a lengthy affidavit to the High Court, which is looking into the legal validity of the April 2 regulations notified by the government, Ola gloats that it is the only cab aggregator to have been issued a license under the new regulations because it has satisfied all conditions.

One of those conditions was to register and furnish the details for 100 cabs.

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Uber, which has not yet received the license, had filed a petition challenging the Karnataka On-demand Transportation Technology Rules, 2016. Uber is challenging some of the rules set by the Karnataka State Transport Authority—including ban on surge pricing and cap on fares—calling these unconstitutional. Going further in its tirade, Ola called Uber’s petition challenging the regulations as “motivated and has been filed in an attempt to bypass the laws of the land by foreign companies who run their operations in this country for profit without due regard for the applicable laws.”

Further endorsing the Karnataka rules, Ola said that the rules were framed with the primary object “to promote and ensure the safety of the user-riders availing the services of aggregators… The rules emphasise the need to provide safety and security to the user-riders.” It also pointed out that UberMOTO, the two-wheeler service, is in violation of the law, and says that without a license, Uber has no right to function.

The Foreign Card, Really?

While Ola and Uber have never exactly been the best of friends, one wonders why would Ola suddenly go nationalist and play the foreign card against Uber? Ola’s apps run on Android and iOS, and it uses Google Maps (none of which are Indian). And on top of that, it has raised money from many foreign investors such as Softbank and Didi Kuaidi.

Uber’s reply to the same has been quite apt when Bhavik Rathod, General Manager – South & West, Uber India, stated in a blogpost,

“Uber has the deepest respect for the laws of India. What makes Uber ‘foreign’? The fact that we are established in San Francisco but have a hyperlocal team solving problems that are locally relevant? Or that, just like our competitors, we received most of our funding from ‘foreign’ investors?

As required, Uber has submitted details for 100 cars to obtain license under the current regulations. But for reasons unknown to us, we’re yet to be granted the license and have instead been asked to undergo the same process all over again with another local authority. Despite this, we are acutely aware that such a license, which only provides a license for 100 cars and leaves out the vast majority of other cars (estimated at close to 100,000), is not the level playing field that the government seeks to create. This is also precisely why Uber has moved the court.”

Companies Who Run Their Operations In This Country For Profit, Really?

Ola’s argument that Uber has no disregard for laws of the land and is only running for profit is another questionable statement. If not for profit, why exactly is Ola running its operations in India after raising huge amounts of foreign funds? Not exactly social service, as one would say.

UberMOTO, The Two-wheeler Service, Is In Violation Of The Law

Ola seems to have forgotten that both Ola and Uber introduced this option in Bangalore on the same day, this March.  However, within a day, Ola and Uber faced law infringement notice from the Karnataka State Transport Department for violating the Motor Vehicles Act and continuing to operate without requisite permission. Hence, OlaBike, which was Ola’s offering, was withdrawn within a week. Uber on the hand tweaked it to a “bikepooling” service where commuters could share the cost of ride.

Ola has now alleged that Uber continued to operate this service in Gurgaon despite being served notices by the relevant authorities. It further adds that Uber has displayed total disregard for user safety. As per Ola, Uber’s ‘Supplemental Terms for Riders in the UberMoto Platform’completely absolve it of user safety. The terms say, “All responsibility and liabilities for any actions or inactions of the participant (the driver) shall vest solely with the participant, and shall, in no circumstance, be attributable to Uber. Uber shall not be responsible for any loss suffered by you (rider) during, or as a result of any UberMoto activity.”

Uber’s response to the same speaks about the promise they hold in serving the city’s transport needs,

“Products like Autos, Shuttles and Bikes may be unregulated and termed illegal right now but hold promise in serving the city’s transport needs. The need of the hour is for the Government to acknowledge the value that disruptive businesses bring and formulate regulations that maximise consumer benefit while helping our cities.”

It is interesting to note that Ola, which was earlier on the aggrieved side when it had not yet attained the license, suddenly sees itself as a moral, nationalist, law abiding organisation, singing paeans of praises of Karnataka’s new laws which also include some questionable rules such as the ones which say that the driver “shall be a resident of Karnataka for a minimum period of two years and will have a working knowledge of Kannada and any one other language, preferably English.”

Uber meanwhile says that laws should also take into account innovation that has happened in the sector.

“We are a law abiding, for-profit company and that is why it matters that the new laws being framed for a new sector like ours, take into account the innovation and change that technology has brought to the industry. It matters to us that the laws that are getting framed give riders the choice and drivers the opportunities that make them better off. It also matters to us that the regulations apply equally to all.

It’s not about ‘bypassing laws of the land’ but it’s about building for tomorrow by participating today – so we don’t stifle the innovations that are surely coming to us.”

These rules come out a bit protectionist in nature; similar to the one that in order to get a license, one needs to own a fleet of minimum 100 taxis. This goes against the spirit of entrepreneurship and disruption by setting an entry barrier for startups. The fact that Ola is endorsing these and playing the nationalist card is quite surprising. After all, consumers will always choose the better service provider, be it Ola or Uber, Flipkart or Amazon and not the Indian one!

This is the same sentiment which Bhavik echoes when he says,

“There has been a lot of talk about the Karnataka On Demand Transportation Technology Aggregator Rules, 2016 that were recently released. As I read through them, I couldn’t help but think about the reasons why we picked Bengaluru as the first city to launch in India. The startup capital of India has a reputation of embracing disruptive technology. Regulations for our sector reflect how governments are embracing the value that Uber brings. At the same time, these regulations need to enable, not thwart a nascent industry that is shaping future mobility in cities across the world.”

Author

Shweta Modgil

Inc42 Staff

Passion for writing and interest in the start-up space brings Shweta to Inc.42. She has prior experience as a Research Analyst in the venture capital/ private equity space and the auto industry. Fiction writing is her other forte and her first book titled One Hundred Days published by Tara Press debuted in 2014.

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