1. Here’s why Niti Ayog is right to back Ola and Uber apps

Here’s why Niti Ayog is right to back Ola and Uber apps

Though large sections of the government, both at the Centre as well as in the states, are worried about the impact of app-based cab services like Ola and Uber and are in favour of measures to curb their disruption...

By: | Published: November 16, 2016 6:24 AM
A regular office-goer can, with an Uber app, become a taxi operator, say, on the way from home to office and take on paid traffic; a student can, similarly, be an Ola cabbie during the night and earn enough to keep body and soul together. (Reuters) A regular office-goer can, with an Uber app, become a taxi operator, say, on the way from home to office and take on paid traffic; a student can, similarly, be an Ola cabbie during the night and earn enough to keep body and soul together. (Reuters)

Though large sections of the government, both at the Centre as well as in the states, are worried about the impact of app-based cab services like Ola and Uber and are in favour of measures to curb their disruption—like putting a cap on their surge pricing—

NITI Aayog has done well to come out in favour of the cab services. According to a report in The Economic Times, NITI Aayog is in favour of allowing these cabs to offer ‘ride-sharing’, a service that Uber first asked the transport department for permission to start some months ago. In a nutshell, this allows app-based service providers to add non-taxis to their fleet. A regular office-goer can, with an Uber app, become a taxi operator, say, on the way from home to office and take on paid traffic; a student can, similarly, be an Ola cabbie during the night and earn enough to keep body and soul together. Naturally, the move has been opposed by commercial vehicle owners who argue that this is unfair to them, since they have to incur higher costs by registering their vehicles in the commercial class and have to pay higher taxes as well.

Since this is a serious objection, the government has to find a solution to the problem of commercially-registered vehicles, but when technology is offering a big new potential, it would be foolish to ignore it. Lakhs of useless assets—most cars lie idle after they have fulfilled the basic purpose of taking owners to and from office—can suddenly become productive and, with a lot more taxis available as a result, commuter costs can also fall significantly. Decades ago, based on the licence conditions, it appeared pagers were meant to deliver short messages while mobile phones were meant for having conversations on. So, when phones developed the capability of delivering SMS, the government could have argued that this was not allowed by licence—it didn’t, and the telecom revolution got another boost. Today, when WhatsApp has all but killed the SMS industry, and WhatsApp voice looks like it can kill voice calls—it has already made a big dent in international voice calls—the government can turn around and say this is illegal since telcos have paid huge sums for spectrum. Certainly, a via media will have to be found since, if the telcos die, WhatsApp will not create internet pipelines for India, but with the government not rushing in with a solution, telcos have already started moving—and RJio accelerated that move in no small manner—towards flat billing where it is irrelevant whether consumers use voice calls or WhatsApp. There are several other examples of technology offering brand-new solutions—in the context of demonetisation, players like PayTM wouldn’t have been allowed if RBI hadn’t been flexible—and, in each case, consumers have benefitted from it.

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