Ride-hailing giant Uber must apply for a cab aggregator licence within three weeks to operate in Maharashtra, the Supreme Court ordered on Monday. The company can’t seek protection under an earlier interim order of the apex court. Salman SH takes a look at the tussle, and how governments have moved to regulate app-based taxi services
The insistence on a licence, and the story so far
Last year, the Maharashtra government began pulling up cab and bike taxi-aggregators, asking them to comply with the Motor Vehicle Aggregator (MVA) Guidelines, 2020, that was notified by the Centre. These guidelines laid down various conditions for granting of a licence to an aggregator, including compliances with regard to vehicles, norms on regulation of fares, etc.
States were supposed to frame their own norms based on the guidelinies. But Uber and others were operating in Maharashtra with permits under the state’s City Taxi Rules 2017. Uber took the matter to the Bombay high court early in 2022, but, on March 7, 2022, the HC ordered all cab aggregators to get licences under the central norms within a week’s time.
Uber took the matter to the Supreme Court…
Uber then appealed the Bombay HC’s order at the Supreme Court in April 2022, and argued that many conditions in the guidelines are simply not “workable”. The company also stated that it had already raised the issue before the Centre, and therefore, it had chosen not to apply for a licence under the guidelines.
Though the Bombay HC had issued the original order based on a PIL highlighting the lack of effective grievance redressal users of the Uber app, it had refrained from prohibiting such aggregators from offering their services in the meantime, saying it was aware such a move would adversely affect commuters. On April 21, 2022, the SC had granted an interim stay of the HC’s order. However, in a hearing on Monday, the SC, led by CJI DY Chandrachud, said that the company cannot continue to operate in Maharashtra without an active licence.
The insistence on a licensing regime isn’t new. Karnataka and Delhi have already notified licensing and other guidelines.
Uber also operates on a licensing-based regime in the UK and many EU countries (after a top EU court ruled that Uber is a transport service, not a platform for connecting drivers with commuters, which Uber has argued is its true business model).
What Indian courts have said
Since Maharashtra doesn’t have its own regulations for app-based aggregators, the SC ruled that Uber has to obtain a provisional licence by March 6, 2023. In a detailed order, the top court said its interim order permitting Uber to operate without a licence cannot stand as a permanent workaround since “an aggregator cannot work in absence of a licence”. In April 2022, the Bombay HC had declared Uber and Ola to be illegal since they were operating without any licences.
Cab aggregators and states have historically disagreed on licensing norms
The latest SC order could push up costs for Uber, some experts say. Last month, the SC also refused to entertain bike-taxi aggregator Rapido’s plea, challenging the Bombay HC’s ruling that Rapido will continue to be illegal in Maharashtra without a licence. App-aggregators have run into trouble with various state governments over licensing norms on multiple occasions.
In 2021, Karnataka officials raided the Bengaluru offices of Ola and Uber India for various allegations of non-compliance with state-government norms. However, state governments have a history of excessively regulating urban mobility and transport apps, especially bike-taxis, for which they have received backlash from both customers and companies alike. The Karnataka government had earlier cracked down on bike-taxis offered by urban mobility startups, which have had far-reaching effects on the segment.
Apart from cab aggregators, Karnataka has also acted against bus shuttle services offered by Ola and ZipGo in the past. In 2015, Bengaluru-based shuttle bus app ZipGo suspended services several times in the city after the state transport department alleged it had violated rules and was operating without the necessary permits.