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App-based Cab Aggregators: Rough Ride Ahead

App-based Cab Aggregators: Rough Ride Ahead
Regulation of app-based cab aggregators like Ola and Uber will improve the services/Photo: UNI
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Above: Regulation of app-based cab aggregators like Ola and Uber will improve the services/Photo: UNI

Following a Supreme Court directive, Madhya Pradesh, along with Karnataka, has cracked down on these service providers and tried to regulate them to ensure quality service and safety of passengers 

By Rakesh Dixit in Bhopal

Taking people for a ride will no longer be in vogue. In Madhya Pradesh, app-based cab aggregators like Ola and Uber will have to pay Rs 1,000 as fine for cancelling a ride or refusing service. The state government is introducing a new law with a set of regulations for app-cab providers to ensure the safety of passengers and quality of service.

The move follows a Supreme Court direction on July 31 to the centre and state governments to frame a law to regulate app-based taxi service providers, keeping in mind the safety of women passengers. In 2017, the Ministry of Road Transport & Highways (MoRTH) formed a committee to examine issues related to existing permits given to black/yellow taxis, radio taxis, and aggregators. The committee came into being on the order of the Delhi High Court on August 11, 2016. The Committee, headed by the secretary of MoRTH, recommended that city taxis should be allowed to run on app-based platforms. It also said that apps used by aggregators be validated for their integrity by an agency authorised by the ministry of electronics and information technology.

Vehicles in India are operated as per the provisions of the Motor Vehicles Act, 1988 and rules framed under it. Enforcing these provisions rests with the state governments. The Kamal Nath government intends to plug the loopholes in the legal framework which allow the cab aggregators to take advantage and charge fares arbitrarily.

Other states too have taken action. In Karnataka, Ola was suspended in March from operating in Bengaluru for the next six months by the regional transport office for violating its licence conditions. The action followed complaints that it operated illegal bike taxis.

As there is no clarity on a system that checks taxi hiring, strong regulation is needed, especially as these services affect the public at large and have a serious impact on the labour market, said official sources. Cab aggregators use algorithms to determine fares based on real-time cab demand and supply in an area. Fares are dynamically adjusted upwards when the demand exceeds supply. Higher fares incentivise drivers to go to the area, correcting the demand-supply imbalance. However, at times, and especially during holidays, these services can charge exorbitant rates as there is no mechanism to check their pricing strategies.

There have been incidents where drivers associated with these platforms have faced charges of sexual assault. These companies argue that they are not responsible for misconduct by the drivers as they are only facilitators, bringing drivers and passengers in contact. State governments have been taking some steps to bring these cab aggregators under a regulatory framework. These include directing companies to establish 24×7 call centres for customer service and grievance redressal, instructing them to be transparent about their policies on taxi fares, ensuring that companies maintain taxi and driver registration and drafting essential dos and don’ts for drivers, among other things.

MP has sent new regulatory rules to its law department and a gazette notification is expected by the month-end, said Niyaz Ahmed Khan, deputy secretary, transport department. The rules cover not only cab aggregators but also firms that provide autos, rental bikes and taxis.

The new Motor Vehicles Act, 2019, governs taxi aggregators and addresses the safety of women passengers. The law holds ride-hailing companies responsible in cases related to women’s safety. And if these companies are found flouting the norms, they will attract a penalty ranging between Rs 25,000 and Rs 1 lakh. However, the law is not clear on parity of fares and passengers’ right to service. Aggregators will now have to pay a fee and take a licence from the transport department after meeting the criteria in Madhya Pradesh.

“From safety of passengers to condition of the vehicle and fares, every aspect will be regulated,” said an official.

The state government will fix minimum and maximum fares so that passengers aren’t fleeced and neither does any firm undercut others. The notification will specify mandatory criteria for providing cab services, with security being the top priority. Police verification of drivers will be made more stringent. GPS tracking of cabs will be made simpler, say transport department sources.

When the Supreme Court heard a petition related to safety and security of women last month, it asked the centre to put in place regulations for cab operators. The bench comprising Justices SA Bobde, R Subhash Reddy and BR Gavai asked the petitioner, Nipun Saxena, to make a representation, along with suggestions, to the centre on regulating app-based taxi service providers.

“The concept of renting a cab is very risky as aggregators are running online quotas and make agreements with drivers. As a result, it is difficult to put liability on an individual,” Saxena said.

Senior advocate Indira Jaising, who is assisting the apex court as amicus curiae, told the bench that internet-based taxi service aggregators are “unregulated” and they are operating in “a vacuum”. The amicus said the Court had asked all states and Union Territories last year to set up at least a “one-stop crisis centre” in every district within a year. A crisis centre is a community-based organisation that works to help victims of sexual offence by providing counselling and other facilities. “As per the directions of the Supreme Court, suggestions to regulate mobile-based cab services have been submitted. Now it is time for the centre to implement them,” Jaising reportedly said. She said that app-based taxi service providers were not covered under the Motor Vehicles Act. She referred to the 2012 Nirbhaya gang rape and said the problem was that the transport department was not monitoring public transport.

Last year, following a sexual assault by a Uber driver in Delhi, the cab aggregator shut down service. It resumed with the government’s new radio taxi cab scheme. However, in the first week of August this year, a similar assault allegedly took place in Delhi. An MNC executive said she was drugged and raped by an app-based cab driver while she was returning from a friend’s house. The victim was found in a semi-conscious state near a park in South Delhi. These and other such cases set off alarm bells. Twitter and Facebook are flooded with complaints from women riders, many of whom allege that even the “emergency button” in the app often doesn’t work. In the wake of public outrage, the Delhi government came up with new regulations for radio cab services such as Meru and Easy Cabs and mobile app-based taxi services like Uber and Ola. It said that Uber must have a minimum fleet of 200 cabs which need a panic button and a 24-hour call centre.

Madhya Pradesh’s initiative is expected to make other states frame laws for safer rides in app-based cabs.

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