Five-year-old court order saves Ola and Uber in Karnataka

Bengaluru: A five-year-old interim order by the Karnataka High Court has paved the way for app-based ride-hailing firms Uber and Ola to remain operational in Bengaluru—one of their biggest markets in India—even though their licences have lapsed.

In 2016, the transport department had issued licences to the two cab aggregators for a five-year period under the Karnataka On-demand Transportation Technology Aggregator Rules, 2016. But on Dec. 7 that year, a division bench of the high court had directed the transport department not to take any coercive action under the new rules after Uber and others challenged them in court.

While Ola’s licence to operate as an app-based taxi aggregator expired in June, Uber’s expired last month. Both have applied for renewal of their permits but the transport department has not processed their applications. Officials said that this was because the companies violated some of the rules and didn’t follow procedure when filing their renewal applications.

But because of the 2016 order, the government said it cannot act against the two firms. “The high court has directed the government not to take coercive action against cab aggregators. Their writ appeal challenging the aggregator rules is still pending,” Rajendra Kumar Kataria, principal secretary, transport department, told ET. “We have sought legal opinion on how to deal with applications requesting renewal of licence,” he added. The department has now written to the government, seeking advice on this.

“The regulations require an aggregator to apply for renewal of licence 60 days before its expiry. But both operators have not complied with this,” L. Hemantha Kumar, additional commissioner, transport department, told ET last week.

According to the department, Ola applied for renewal on July 15, 2021, only after it was issued a notice asking it to cease operations in the city and report compliance. Uber, officials said, applied for renewal only four days before its licence expired.

An Uber spokesperson had earlier told ET that the company had applied for a renewal last month and had received an acknowledgement for this.

Karnataka was among the first states in India to draw up rules for app-based cab aggregators, which have always argued that they are technology platforms and not transport operators. The Karnataka High Court had ruled in favour of allowing the state to regulate such entities, while striking down some clauses in the rules relating to data collection by the state government.

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