Karnataka Govt orders Ola, Uber to stop Auto services, calls them “illegal” for overcharging customers

The Transport Department received complaints stating that Ola, Uber charge ₹100 even for a distance below 2 kilometres

The Karnataka Transport Department has issued a notice to app-based bike and cab aggregator services Ola, Uber and Rapido to stop their three-wheeler auto services within the state in 3 days and has termed them “illegal” under the On-Demand Transportation Technology Act 2016.

The notice called out the aggregators for overcharging and harassing consumers after the Transport Department received several complaints stating that Ola, Uber charge ₹100 even for a distance below 2 kilometres. According to government norms, auto drivers are eligible to charge a fixed rate of Rs 30 for the first two kilometres and Rs 15 per kilometre thereafter.

Moreover, the State Authorities have asserted that the ride aggregators are not eligible to run auto services as rules are applicable to taxis only.

They are not authorised to ply autos with a cab-aggregator license. Taxis means a motor cab having a seating capacity not exceeding six passengers, excluding the driver. They are charging exorbitantly and it’s a serious complaint,” Hemantha Kumara, Additional Commissioner for Transport, Bengaluru, said, adding, “we can’t tolerate harassment meted out to customers and justify the exorbitant rates”.

The cab aggregators have been asked to stop their auto services at the earliest and also to not charge passengers in taxis more than the government-prescribed fare.

Ola and Uber have declined to comment as of now, while a Rapido spokesperson has said, “We would like to clarify that none of our operations in Bangalore are illegal. The allegations regarding overcharging by Rapido on auto taxi fares are completely false. All our fares are determined in accordance with the fares decided upon by the state government, and Rapido is not charging any extra money over those fares.”

The cab aggregator services have been having their run-ins with the Karnataka State Government since 2016, with the most recent one being in March 2019 when Ola Bike Taxis were declared illegal by the Transport Department. In a major operation, several bike taxis were impounded and seized. Some of the reasons given for banning Ola Bike Taxis were safety issues, no clear regulations, and traffic hazards.

Meanwhile, auto unions in the city are also in the process of launching their own app for mobile called ‘Namma Yatri’ on 1st November in partnership with Beckn Foundation.  

“We’ll follow the government-fixed fare and collect an additional ₹10 as pick-up charges. We also plan to launch a flat ₹40 fare in 2 km radius between Metro stations and residence/office,” Autorickshaw Drivers Union President D Rudramurthy said.

India is a high-growth market for cab aggregators as people seek to avoid driving on congested roads in high-traffic conditions. For the same, autorickshaws or tuk-tuks have since long been the most economical modes of short travel.

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