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‘Ola, Uber In Violation Of Government Rules’: Radio Taxi Association To Government

‘Ola, Uber In Violation Of Government Rules’: Radio Taxi Association To Government

The struggle for Ola and Uber to co-exist with other transport providers is getting difficult by the day. According to reports, the Radio Taxi Association has written to the government, stating that both cab aggregators are defying the marketplace guidelines issued earlier this year by the government.

According to a letter dated May 25 to the ministry of finance, the governor of RBI and the enforcement directorate, the Association Radio Taxi (Mega Cabs, Easy Cabs and Meru Cabs) association has said that Ola and Uber’s business models are in “gross violations of the foreign direct investment guidelines on marketplace model of ecommerce services.”

The newly defined policy states that ecommerce entities will not directly or indirectly influence the sale price of goods and services and shall maintain a level playing field.

The letter states that “Uber and Ola continue to blatantly violate the law by influencing the price paid by the consumer, both directly and indirectly, through cash discounts, financial inducements and disproportionate incentives to taxi owners and drivers.”

The drivers on both platforms are offered schemes to complete more rides. Additionally, the cab fares are slashed down substantially compared to the cab fares, charged by the Radio taxis that work on government regulated fares.

The letter also states that both the aggregators are in violation of the basic meaning of a marketplace as defined by law to be a mere facilitator between buyers and sellers, as they do not give drivers an option to accept or reject a fare and instead offer guaranteed businesses.

The development was reported by ET.

Prior to this in May 2016, as per a recent notification by the Karnataka Transport Department, Ola and Uber were reportedly asked to shut down services in Karnataka.

As per the circular, the aggregators operating un-licensed cabs in the city were asked to shut operations with immediate effect as this is in violation of the section 193 of the motor vehicles act.


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Author

Aparna Mishra

Inc42 Staff

After a 2-year-stint at Ernst & Young, Aparna moved to Journalism. Her prior experience enables her to understand business management. An avid reader and a traveller she hopes to gain insights on the startup ecosystem at Inc42.

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