The decision was taken after Ola failed to come up with a satisfactory response over the transport department's probe into its bike taxis in Bengaluru. The department had seized several bikes earlier this year. On the other hand, Ola claimed that it had halted bike taxi "experiment" weeks ago.
The transport department of Karnataka has banned ride hailing company Ola for six months in Bengaluru due to failure of its bike taxi service to comply with the licence regulations despite the department’s earlier notices on the matter to the company. Ola, on its part, has claimed that it halted the bike taxi service weeks ago and instead had asked the government for a legal framework around it. Ola’s arch-rival Uber had stopped its bike taxi service UberMOTO in Bengaluru around two months after launching it in March 2016.
“Despite other companies continuing to operate illegally, Ola halted our bike taxi experiment weeks ago, instead seeking the state’s cooperation to develop a legal framework for a pilot that will continue to take advantage of emerging opportunities in the mobility economy,” the company said in a statement.
Ola called the notification “unfortunate” even as it would look to address the suspension directly with state officials, the company said.
According to the transport department, Ola was issued licence only to operate app-based cab service while the bike taxis were never permitted.
“Two-wheeler operations are not in their scope. Bike taxis are not included in their licence. They can operate only cabs. Karnataka doesn’t have provision to operate bike taxis,” a senior official at the Karnataka transport department told Financial Express Online.
“Earlier this year, Transport Department officials had seized several bikes which were operating as bike taxis for Ola. The officials probed the case and submitted a report to the Transport Commissioner. According to Section 11 (1) the Karnataka On Demand Transportation Technology Aggregators Rules 2016, the Transport Department can decide to cancel the license of the cab aggregator as there is a violation of rules,” said the notice sent on March 18 and seen by Financial Express Online.
“Local associations have complained to the government. The law doesn’t recognize two-wheeler as taxis then how can Ola they operate it,” said an industry source requesting anonymity.
Ola had responded to a notification sent by the department on February 15 pertaining to the probe, on March 3 but the response wasn’t satisfactory.
“As the company’s reply was not satisfactory and did not provide any evidence which proved it did not violate norms, the Transport Department, as on March 18, 2019, has decided to suspend the license of Ola for a period of six months. Ola will have to submit the original copy of the license within three days of receiving a copy of this order,” the notice said.
“This is not the first time. They (Ola) are repeatedly doing this,” the official said.
In February, several bike taxis operated by Ola and smaller rival Rapido were reportedly impounded in Bengaluru.