Relief for Uber, Ola as Karnataka HC directs govt not to seize their cars

The Karnataka High Court on Wednesday directed the state transport department not to seize cabs affiliated to Ola and Uber Inc for allegedly plying without license, and also restrained the cab aggregators from demanding surge price from commuters.

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"The Karnataka High Court has directed the cab operators not to demand surge price from commuters, and we as the government agency will honor the ruling of the court, asking us not to impound cabs affiliated to Uber and Ola for plying without license," State Transport Commissioner Rame Gowda told PTI here.

Making their submission, counsel for transport department said the cab aggregators, under the provisions of the Karnataka On-demand Transportation Technology Aggregator Rules 2016, should hold effective license issued to them.

Gowda, on May 28, had said that the cab aggregators, not having license, should immediately cease plying taxis and warned of impounding the vehicles.

"The companies which have not obtained licences from the concerned authority should stop operations with immediate effect otherwise strict action will be taken against such operators," he said.

The Karnataka On-demand Transportation Technology Aggregator Rules 2016, which was notified in April, said, "No person shall act or permit any other person to act as an aggregator unless he holds an effective licence issued to him under these rules".

The transport department, had in April hit the cab aggregators by increasing the penalty from Rs 1,000 to Rs 5,000, for allegedly operating services without obtaining necessary license, inspite of its repeated warnings to them.

The next hearing has been posted to June 20.

However, the US-based Uber has filed a petition in state high court, requesting it drop the new rules that require online taxi aggregators to acquire licenses and end surge pricing, a Business Standard report said.

For the second time, Uber has challenged the rules of local authorities after having taken on the Delhi government for denying it a license to function in the capital region.

Uber’s move comes days after the Karnataka commissioner of transport directed taxi aggregators to suspend operations till they secured licences under the new norms.

The progress in Karnataka’s licensing move is being watched by other states and may have an impact on the business model of these aggregators, the BS report said.

However, Uber has promised the Karnataka high court that it will not resort to surge pricing, indicating a temporary truce ahead of a legal battle to determine the validity of new regulations governing app-based taxi aggregators, Economic Times reported.

With PTI inputs