Government to formulate broad set of rules for Ola, Uber soon

Union Government’s proactive stance regarding road safety was reflected in the Motor Vehicles (Amendment) Bill, 2019 that was passed in Rajya Sabha after three amendments. The proposed bill raised penalties on violations and set a framework to bring the archaic road safety laws in India on par with the 21st century.

The new bill will give the central government a platform to set the ground rules for taxi aggregators such as Ola and Uber, whose operations have been surrounded by legal ambiguity and court hassles as the old laws didn't recognize ride-sharing services, allowing them to operate without a license.

The Motor Vehicles (Amendment) Bill 2019 sets clear definitions and regulations regarding cab aggregator services. An “ aggregator” has been clearly defined as a digital marketplace for customers and drivers to connect and avail transportation services.

It also directs that cab aggregators to get a license issued by the state government as per the new policies, violating licensing regulations will invite a fine up to Rs 1 lakh

As per media reports, the Central Government will also draft new rules for ride-hailing services using the new law as a platform. The new rules will address the major issues such as arbitrary surge pricing, women's safety and the types of permissible vehicles which has been under contention by several states regarding the use of bikes and autos.

The new rules will focus on the safety of women passengers who avail these cab services as violence against women has been one of the most serious issues identified in recent years. The rules will mandate the responsibility in case of a mishappening, crime or any other accident in the duration of a cab ride.

The central government will also set regulations regarding the ownership of the vehicles. 

These companies lease their own vehicles to drivers on a preset lease payment that's deducted from the daily earnings of the cab drivers.

The other two major problems of surge pricing and the kind of vehicles allowed on these platforms shall be addressed under new guidelines as some states have banned the use of bike taxis while others have issues with arbitrary pricing. The model of surge pricing during peak hours, forcing commuters to shell out more money for traveling the equivalent distances has been noticed by the apex court as well.

The development comes after a Supreme Court bench headed by Justice SA Bobde, had asked the central government to put new laws in place to ensure women safety and recognize cab aggregators as separate entities.

The Union government will be meeting the industry stakeholders in the coming months to discuss the new policies and frame a broad set of rules.