The Centre has proposed a model law that will allow private vehicles to operate as taxis — by paying a fee and obtaining permission online — according to a new report. The proposed law will also allow aggregators to charge up to three times the minimum fare during the day and up to four times between 12am and 5am.
This means private car owners will be able to register with cab aggregation platforms like Uber and Ola and ply their vehicles commercially, splitting the cost of the ride with other passengers while receiving incentives from the aggregator.
Last year, Uber had started a similar model where a car owner could share a ride with others willing to share the cost of the trip. Indian rival Ola too had introduced a similar feature in Delhi last year, allowing users to create a friend list on the app and to pool rides in their cars. The shared rides services were voluntary and free of cost, but the cab aggregator did not give any incentives to the driver.
Private car owners will soon be able to ply their vehicles for Uber and Ola, splitting the cost with other passengers while receiving incentives
The law — if enacted — could provide a major boost to ride hailing companies like Ola and Uber as the supply of vehicles is likely to increase dramatically.
Consider this: As on October 31, there were a total of over 12 lakh registered cars on Bangalore roads, 20 lakh in Delhi and over eight lakh each in Mumbai and Chennai. Even if 10 percent of them opt to run their private cars as taxi, it would mean an extra one lakh cars or so will be attached to cab aggregators. The owner can share the cost of the ride and will also get an incentive on each drive he shares. This will also help reduce congestion — as more people will be sharing rides vis-a-vis driving individual cars — and bring down the cost of each ride.
Currently, Ola and Uber have a fleet size of 4.5 lakh and 4 lakh respectively in India.
The law — if enacted — could provide a major boost to ride hailing companies like Ola and Uber as the supply of vehicles is likely to increase dramatically
The model law is currently being evaluated and is likely to be made public by next week. The law also mandates that all taxis must be less than four meters in length to be categorised as “economy taxis” and all of them must have an app-based metering system that must be approved by an agency.
Model laws are proposed laws relating to any topic, which a state may choose to accept or reject. Once the state chooses it, it becomes a statutory law in that state. However, states have previously objected to laws related to ride sharing. For instance, earlier this year, Karnataka’s commissioner for road transport and safety Rame Gowda accused Uber of violating the rules with its private car pooling service.