Uber, Ola face policy challenge: Maharashtra state govt draft policy hostile to app-based aggregators

The State and Centre are not seeing eye-to-eye on the policy on taxis in Mumbai.


The State and Centre are not seeing eye-to-eye on the policy on taxis in Mumbai. A committee appointed by the Ministry of Road Transport and Highways (MORTH) has proposed a number of policy changes for the Maharashtra state government’s draft policy on taxi services in Mumbai.

Unfortunately, both parties appear to have opposing views on some topics and state government authorities are free to ignore the MORTH recommendations, reports The Hindustan Times.

The state government’s proposed rules will directly impact app-based taxi services and aggregators like Uber and Ola and that impact is likely to extend to regular commuters.

The Centre suggests that there should be no restrictions on tourist taxis, i.e. taxis with All India Tourist Permits (AITP). The State, however, feels that tourist taxis should not be operated as app-based ones. In fact, the State insists that all tourist taxi operators will be required to get new permits in-line with state guidelines within three months of the implementation of the new rules.

The state also wishes to enforce a policy that will impose restrictions on the fleet composition of app-based taxi services. 50 percent of taxis in an app-based taxi fleet will need to be comprised of vehicles with an engine capacity of 1400cc or greater. At the same time, the State proposes to charge these taxi fleets Rs 2.61 lakh for vehicles with 1400cc engine capacity and Rs 25,000 for those below that limit.

MORTH suggests no such restriction and recommends that all taxi services be allowed to use any fleet configuration that they see fit.

The committee is also very much in favour of bike sharing, e-rickshaw and ride sharing services. It argues that such services will induce cheaper travel and reduce the number of cars on the road. The State’s recommendations make no comment on ride-sharing, but it is strongly opposed to bike-sharing and e-rickshaw services.

The Maharashtra state recommendations on taxi policy are clearly hostile to app-based taxi services. Comments were invited for the State’s draft policy, but despite strong objections from the likes of Uber and Ola, the policy has reportedly been forwarded as is to Maharashtra’s Chief Minister and transport minister for approval.

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