Karntaka state govt revokes Ola licence for six months

The Bengaluru transport department has decided to suspend Ola’s cab aggregator licence for six months. This is the fallout of Ola’s decision to re-start bike taxi services in Bengaluru without taking prior permission from the department.

In a letter to Ola dated March 18, the department issued a notice asking the company to suspend app-based cabs. The move will cause inconvenience to Ola in its den Bengaluru, while rivals such as Uber are expected to gain from the same.

Earlier in February this year, the Karnataka transport department officials had impounded around 200 bikes, belonging to Ola and Rapido, operating as taxis in Bengaluru terming it as illegal. A fine of Rs 2,000 was also imposed on them for using bikes with white number plates for commercial purposes.

Transport department had made it clear previously that the state is still working on policy and have asked for stakeholders view on the introduction on bike-taxi services. Until then, offering such services are illegal.

On February 15, 2019, the Transport Department had sent Ola a notice, asking the company to respond to the findings of the probe. Ola sent its reply on March 3, 2019. As the company's reply was not satisfactory and did not provide any evidence which proved it did not violate norms, the Transport Department, as on March 18, 2019, has decided to suspend the licence of Ola for a period of six months, reads the notice.

Ola will have to submit the original copy of the licence within three days of receiving a copy of this order.

“This notification is unfortunate, and we look forward to an opportunity to address these concerns directly with state officials to find a solution for our driver-partners and millions of Ola users in Karnataka,” said Ola in a press statement.

The Hyundai-backed firm had piloted bike-taxi service in February in Bengaluru whereas Rapido has been in operation for a couple of years.

This is not the first time the Karnataka transport department has halted the bike taxis services. In March 2016, Uber and Ola both had to suspend its bike-taxi pilot after state government objected to the initiative.

States including Rajasthan, Goa, Uttar Pradesh, Telangana, and Haryana have allowed bike-taxi operation.

The suspension of licence is a massive concern for Ola as Bengaluru and other cities of Karnataka contribute hefty volume for the ride-hailing firm. While nothing can be said about when and how Ola would get the nod to ply on roads of Bengaluru, it must be mobilising everything to come out of the crisis.