Bengaluru: Uber Inc. and the Karnataka government on Thursday continued to spar over the non-issuance of an operating permit to the ride hailing service, with the government redirecting it to a new regional transport office (RTO) for an inspection of its cabs, a process that the company said it had already completed.

The redirection order on Uber came on Tuesday—the same day that its rival Ola (ANI Technologies Pvt. Ltd) obtained a licence under the Karnataka On-demand Transportation Technology Aggregators Rules 2016, notified on 2 April.

Uber, in a statement on Wednesday, said it has submitted a list of 140 vehicles that were inspected by the Koramangala RTO in Bengaluru on 29 May. “The transport department can best explain the delay in the issuance of licence to us. It is disappointing that the innovation capital of the country has drafted rules that are out of step with the progressive regulations that are needed to nurture a nascent sector," said Bhavik Rathod, general manager, Uber India (south and west), in a response to Mint on Wednesday.

According to the department, cab aggregators will require verification and clearance of a minimum of 100 vehicles with GPS, digital meters and a panic button, among other mandatory features, to obtain a licence. The remaining vehicles will have to get clearance over the next few months.

“When the RTO inspected Uber’s vehicles, they had a panic button that was not functional. Hence they were rejected," said H.G. Kumar, additional commissioner for transport, and secretary, state transport authority. He added that Uber had a dispute with the Koramangala RTO, which was why the company had been asked to complete the formalities at Electronic City, Bengaluru.

Uber has denied these allegations, calling them “false".

“Following multiple submissions of our documents, seeking clarification on the application process and inspection to the transport department and we have not got a response till date. Today, we met with the additional transport commissioner and secretary, H.G. Kumar, in person as well to address our queries in the letters submitted and are awaiting a response," the company said. Kumar denied meeting Uber officials.

Uber has dragged the state government to the high court, questioning its “competence" in formulating the on-demand aggregators rules and its provisions, which the company claims contravenes the Central Motor Vehicles Act, 1988.

Following the notification of the on-demand rules, the government cracked down on cab drivers and impounded at least 1,000 vehicles, which were later released on fines ranging from 2,000- 15,000, according to drivers at both companies.

A section of cab drivers has also filed a petition along with Uber’s petition in the Karnataka high court against the state’s aggregator rules.

On 1 June, the state government giving an undertaking not to take coercive action against cab drivers. Uber also suspended surge pricing until the next hearing on 23 June.

Ola declined to comment for this story.

Meanwhile, the state government said UberCommute, a car-pooling service was running without a proper permit and is in violation of rules.

Though the court is yet to hear arguments in the case, A.S. Ponnanna, additional advocate general of Karnataka said that UberCommute is in violation of the Motor Vehicles Act 1988 because it used cars with white number plates, meant for non-commercial use, for commercial purposes.

The Karnataka high court is hearing a case where Uber and other parties have questioned the competence of the state government to formulate the Karnataka On-Demand Transportation and Technology Aggregators Rules 2016.

Launched in January in Bengaluru, any person with a four-wheeler can sign up to provide (or register with) the UberCommute service. According to the information on the company website, the UberCommute app works from 7am to 9pm. Once the driver enters their destination on the mobile app, the company will pair them with another rider heading the same way so that the cost of the journey is shared.

Uber charges a 20% commission on the transaction.

The state government has also alleged that Uber uses vehicles with All India Transport Permit (AITP) for point-to-point services within the city which is also a violation.

Uber did not respond to mails seeking comment.

Ola (ANI Technologies Pvt. Ltd) has also filed its application in the case, which involves the state government, various radio and city taxi operators supporting the formulation of the rules, while Uber and a section of drivers have gone against it and called for doing away with it.

The legal representative for Ola said that they have become party to the case to protect its interests. Ola obtained a permit under the state aggregator rules on Tuesday.