Will supply concerns for Ola and Uber disappear in Bengaluru with regular licence holders joining in?

In a much-needed move, Karnataka has planned to discontinue the requirement of a commercial licence to run private taxis, cab or any other Light Motor Vehicle. Now any person who holds a valid private light motor vehicle (LMV) driving licence can own and run commercial vehicles in the state.

The step is said to be beneficial for cab aggregators such as Ola and Uber, which require more drivers on their platform due to high demands in Bengaluru. Likewise, the move will also be helpful for customers who have been facing scarcity of on-demand cabs in the state capital.

To address the issue, both cab aggregators have been inviting people to join the platform with a regular licence. As the matter was pending at State Transport Department, they were unwilling to take the risk, which further increased the demand.

In April, this year Supreme Court had clarified that there is no need under the law to obtain a separate licence for driving a light motor vehicle — transport or non-transport - for it to be used as a commercial vehicle.

Also Read: Karnataka may suspend Ola and Uber license for flouting distance-based fare structure

Following the ruling of the apex court, the Union Ministry of Road Transport and Highways asked the State governments to comply with the order. However, rules for police verification for becoming a driver-partner to either firm will be as usual.

At present, commercial driving licences need to be endorsed every three years, while driving licences for private vehicles are issued for longer durations.

Bangalore Tourist Taxi Owners Association (BTTOA) has welcomed the decision saying that the tourism sector alone needs at least 20,000 more drivers to meet the escalated demand and supply gap that has been prevailing over recent years. It will also encourage women to get into the job.

Nevertheless, taxi unions (Uber and Ola Drivers’ Association) have criticised the move alleging that it will have a negative impact on existing driver partners as it would take a further toll on their falling income.

While we don't know to what extent the move would solve the demand and supply crisis in the technology capital of the country, it certainly is a laudable decision by the state government.

Besides on-demand cab-hailing apps, the abolishment of commercial licence for professional driving would also help the supply-starved tourism sector to attract a fresh workforce.

The development was reported by The Hindu.