Uber India Drags Taxi Associations To Bombay High Court, Sues For $1.9 Mn

2017 has been majorly about bans, strikes, driver protests and legal encounters for Uber India. Be it Karnataka, Chennai, Delhi, Bengaluru, or Mumbai, drivers are agitating and revolting against low incentives and stiff performance targets. Not to forget, the troubles created by state taxi associations in different parts of the country and how the drivers were jolted into creating a new app all by themselves.

Initially, Uber India tried seeking help from state governments and resolving the problem with the drivers amicably with drivers as well as the media, via meetings and blogs. However, after the Mumbai incident, it seems that Uber India has decided ‘enough is enough’ and has finally knocked on the doors of the Bombay (Mumbai) High Court.

Reportedly, the cab aggregator has filed a suit against taxi owners and drivers associations seeking $1.9 Mn (INR 12.41 Cr) in damages for harming its reputation and the livelihood of drivers, according to The Hindu. The suit names the Sangharsh Tourist Chalak Malak Sangh, an association of taxi owners and drivers; Action Committee of Maharashtra against Ola and Uber, Mumbai Vikas Foundation; All Drivers Welfare Association and Maharashtra Tourist Permit Union as defendants.

The matter is likely to be heard by Justice S J Kathawalla in due course.

The Uber-Mumbai Story

The Uber-Mumbai tussle began in October 2016, when the Maharashtra state government released the draft of Maharashtra City Taxi Rules, 2016. In this regard, 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.

However, things got out of hand when, in March 2017, about 8,000 Ola, Uber drivers went on strike in Mumbai. The strike was called to protest against low incentives from cab aggregators as well as the new rules under the Maharashtra Motor Vehicle Rules 2017.

In its suit, Uber has alleged that, during the protest, Uber drivers’ mobile devices were snatched and the vehicles were damaged. Also, passengers were verbally abused and physically assaulted. To date, 830 such incidents have been registered, as claimed by the cab aggregator. With this move, Uber India has also demanded an injunction from the court to stop the alleged taxi associations from stopping Uber drivers to work.

As stated in the suit filed, “The defendants are deliberately, unlawfully, and wrongfully resorting to violence and intimidation under the garb of strikes and protests in Mumbai and, thereby, restraining drivers associated with the plaintiff’s mobile app from operating and pursuing a livelihood.”

It further alleged, “The defendants have been hampering the legitimate business of plaintiffs (Uber) by interfering in their operations quite extensively across the city of Mumbai. They have been indulging in threats to the driver partners of Uber, in the event they wilfully continue to drive using the Uber App.”

Recently, the Sarvodaya Drivers’ Association of Delhi (SDAD) and the Rajdhani Tourist Drivers’ Union again planned to go on a strike in Delhi against Ola and Uber. However, the court issued an injunction against the taxi driver unions from disruption services of the cab aggregators.

Uber’s Speed Bumps In India

In July 2016, Delhi-based radio taxi aggregator Meru had accused Uber to be a ‘law breaker’ and ‘a company which monetises on price-play,’ in its blog post. To Uber’s relief, however, in January 2017, the Supreme Court put the Competition Commission of India on hold from initiating a probe against Uber over taxi-hailing platform Meru’s complaint.

In the same month, the Delhi Autorickshaw Sangh and Delhi Pradesh Taxi Union called for an indefinite strike against app-based taxi services in Delhi. In August 2016, the Delhi High Court had issued a notice to Ola and Uber to stop surge pricing and follow government prescribed fares.

In September 2016, reports surfaced that the Indian Government is planning to establish a maximum limit on fares to monitor surge pricing by online cab aggregators like Uber and Ola.

Following that, in November 2016, 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. Later the same month, the drivers also started a 36-hour strike in Guwahati protesting against the revised incentives.

Initiatives To Strengthen Foothold In India

Uber recently launched its business solution – Central – in India, which is fully integrated into Uber for Business. Uber for Business (U4B) is a transportation management platform that enables companies or teams to set up a corporate Uber account. Central allows an organisation to centrally request, manage, and pay for rides.

Also, Uber will be launching its food delivery app UberEATS in India in the second quarter of 2017. The services will initially be launched in six cities – Bengaluru, Hyderabad, Pune, Mumbai, Chennai and Gurugram – and will expand further.

Last year, Uber partnered with Porsche to offer its #SuperCars to Mumbai’s car fanatics and also shared intentions to launch UberEverything – a ride-hailing service for buses and mini-vans. It also invested $30 Mn (INR 200 Cr) in Mumbai-based car leasing firm Xchange Leasing India Pvt. Ltd, between June and September to strengthen its supply. From commuter perspective, Uber introduced UberPOOL which allows multiple riders travelling in the same direction to share the same care and pay a much lower fare much before Ola did. It recently launched the feature to book a cab on Uber without the app too. In September 2016, Uber launched a trip scheduling service, to book a cab in advance.

All in all, Uber, a company worth $69 Bn has had significant legal and ongoing issues in a country that it claims to be the second-largest market, worldwide. Now, with Uber taking the onus of wanting legal recourse, it remains to be seen how the suit and its ensuing fallout (amongst fellow competitors, driver partners, and passengers) plays out.

Update: April 24, 2017, 14:30

The Bombay High Court has passed the verdict in favour of Uber and has restrained taxi associations from hindering the work of Uber drivers. The court has also directed the Joint Commissioner of Police to ensure that Uber drivers are not stopped or blocked on the roads and their vehicles are not damaged.