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Road to Safety

As the Delhi government outlaws bike taxis, issues of pricing and customer safety have cropped up. Will regulation manage these concerns so that lakhs of passengers get last-minute connectivity?

By Sanjay Raman Sinha

The recent order of the Delhi administration banning the use of two-wheelers as bike taxis has not only hit short-distance commuters, but multinational app-based transport aggregators like Ola and Uber. The Delhi Transport Department has said that bike taxis in Delhi violate the Motor Vehicles Act, 1988. The Act prohibits using two-wheelers for commercial purposes. 

The ban will affect aggregators like Rapido, Uber and Ola which operate bike taxis. Those violating the order will be penalised with a fine of Rs 1 lakh. The Delhi government is planning to frame rules to regulate bike taxis and get it okayed by the law department. 

However, the amended Section 93 of the Motor Vehicles Act, 1988 has included the provision for cab aggregators such as Ola and Uber as digital intermediaries. The Motor Vehicles (Amendment) Act, 2019 adds aggregators as a third category, and they have to obey the rules of the Information Technology Act, 2000. The rationale behind including cab aggregators under this Act is to increase safety for passengers and pedestrians.

As per the Act, an aggregator is a digital intermediary or marketplace for a passenger to connect with a driver for the purpose of transportation. A rider is a person who avails services through the aggregator app for reaching the destination by a driver who is integrated with the aggregator.

As cab drivers of Ola/Uber and other aggregators use handheld devices to navigate the destination and get customers online, the safety of commuters and pedestrians is a matter of concern. Hence, the aggregators have been included in the amended Motor Vehicles Act.

A provision in the Act says: “The State Government shall ensure electronic monitoring and enforcement of road safety in the manner provided under sub-section (2) on national highways, state highways, roads or in any urban city within a State which has a population up to such limits as may be prescribed by the Central Government.”

Since the advent of bike aggregators in 2015, intra-city commuting has been easy and relatively cheap. The monopoly of auto drivers has been broken. However, the “captains”, a euphemism for bike drivers, have always bemoaned the raw bargain meted out to them.

Anand Pal, a bike driver operating in Noida, told India Legal: “We get only 70% of what the customer pays. Half of it goes in petrol, the remaining is too meagre for us to make a living. If one doesn’t have any job, this is an option. Otherwise it is a bad bargain for drivers.” Most of the drivers are registered in more than one app and operate accordingly to maximise.

Ride-hailing services such as bike taxis enable passengers to book a bike using the online app and provide a convenient means of transportation. Bike taxis have burgeoned and customers have an option to choose from many players such as Rapido, Uber, Ola and others. India’s bike taxi market was valued $50.5 million in 2021 and is expected to reach $1,478 million by 2030.

The unbridled rise in bike taxis has raised concerns about road safety as well. The amendment makes sure that the government has a say in regulation making, but also has provisions to ensure safety. It also makes sure that the driver is properly trained. The Act says that “any person who has successfully completed a training module at such (driving) school or establishment covering a particular type of motor vehicle shall be eligible to obtain a driving licence for such type of motor vehicle”.

As the bike taxis operate and touch the lives of lakhs, it is incumbent on the government to ensure that monopolistic practices and unfair pricing are not resorted to. The amendment gives the government a way to organise and control the transport aggregators. Prior to the amendment, there was lack of uniformity in pricing, fares, etc.

As per the amendment, the centre can frame guidelines to guard consumer interest. The government has even recognised the taxi aggregators as a key stakeholder. Interestingly, by capping the commission rates, the government is trying to regulate how the aggregator business makes money. Similarly, the government states that the cancellation fee will be borne by both parties and must not exceed Rs 100.

The commission charged by the cab aggregators earlier was 25%; it is now capped to 20%. The surge fee, which acts as an incentive, has been capped at 1.5 times the base fare. Furthermore, the guidelines of the Act aim to reduce traffic congestion, pollution, promote consumer safety and help state governments make laws for aggregators to be held responsible for their operations. The Act also modifies the compensation and insurance provisions in case of motor vehicle accidents. Bike taxis are a grey area of law.

The Motor Vehicles Act of 1988 does not recognise two-wheelers as taxis unless the status is granted by state governments. A case in the point is when Maharashtra refused to grant licenses to Rapido’s motorbike taxis, saying there were no legal guidelines on their licensing, safety and fare structure. The company went to the Bombay High Court, which then ordered the company to shut down operations as it had no valid license. Rapido then approached the Supreme Court, which directed it back to the High Court.

In another case, the Supreme Court refused relief to Rapido after the Karnataka government banned the use of non-transport vehicles for aggregation and car-pooling. The reason was safety and security of passengers. State governments are expected to issue licenses to aggregators in conformity with guidelines issued by the central government. However, the Act does not define/specify the guidelines. This creates ambiguity. 

If the state guidelines are different from the central ones, then the latter will prevail because motor vehicles laws fall under the Concurrent List in the Seventh Schedule to the Constitution.

Burgeoning urbanisation has ensured that bike taxis are here to stay. Banning them is not the answer. Regulating them to subserve public good is more important. The need of the hour is cheap, safe and easily accessible short-distance commuting facility. Bike taxis are the answer to this. Governmental regulation should help, not hinder their growth.

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