Dec 21, 2016

Uber, Ola apps to have Big Brother watching over them in India


The Ministry of Road Transport and Highways, India’s central ministry for all things transport, has released guidelines Wednesday as part of a model law for tourist taxis, e-rickshaws, aggregators, radio taxis and bike taxis.
Dipak K Dash of Times of India had last week scooped the guidelines prepared by the MoRTH committee. We at FactorDaily had led with what we thought was the most important recommendations as part of the MoRTH guidelines: allowing private cars to run as taxis.
The devil almost always lies in the detail and the MoRTH guidelines are no different. Here’s a list of some curve balls flying around:

  1. Cab or ride share aggregation platforms such as Ola and Uber will now need to get their apps validated by a standardisation testing and quality certification authority or any other certification agency authorised by the Ministry of Electronic and Information Technology. The companies should be prepared for audits and must take measures like a firewall for enhanced user data security of passengers.
  2. While the MoRTH committee had allowed surge fares of 3x the minimum fare in the day and 4x between midnight and 5am, the transport departments of different states have been given the flexibility of fixing the surge multiple. In other words, the permissible surge pricing could be anything. This should be viewed against  the backdrop of several state authorities in Karnataka and Maharashtra opposing dynamic pricing or surge pricing. Earlier this year, the Delhi High Court had banned surge pricing.
  3. The MoRTH guidelines clearly mandate that aggregators should have a physical presence in each state.
  4. It gives states the flexibility to set a cap on the duty hours that drivers on aggregation platforms can operate. The platforms have been criticised in the past for not having such a cap with concerns ranging from road safety to driver welfare. It is not uncommon to see Ola and Uber drivers spend 12 to 14 hours behind the wheel for weeks without a break.
  5. Notably, the guidelines talk about bikes and e-rickshaws but not about auto rickshaws, the preferred mode of ride hailing vehicles on Indian roads.

Taxi aggregator Uber did not respond to a request from FactorDaily for comment on the MoRTH guidelines. Ola, its competitor in India, called the guidelines “progressive and forward looking”. “This is definitely a significant move in the interest of India’s unique and growing mobility needs, which need to be addressed holistically,” Pranay Jivrajka, Ola’s chief operating officer said in a statement.
The MoRTH committee, headed by Sanjay Mitra, secretary or the highest-ranking bureaucrat at the ministry, had six members including the transport commissioners of Delhi, Madhya Pradesh, Maharashtra, and Telangana.
As we had pointed out last week, model laws are proposed laws relating to any topic, which a state may choose to accept or reject. It’s over to the states, then, as far as the future of Uber and Ola in India is concerned.

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prabhakaran is a writer of FactorDaily.