Since cab aggregators like Ola, Uber use technology as a platform to reach out customers, Motor Vehicles Bill also ensures that every such aggregator shall comply with the provisions of the Information Technology Act, 2000. Photo: HT
Since cab aggregators like Ola, Uber use technology as a platform to reach out customers, Motor Vehicles Bill also ensures that every such aggregator shall comply with the provisions of the Information Technology Act, 2000. Photo: HT

How the Motor Vehicles Bill affects Ola, Uber

The Motor Vehicles (Amendment) Bill seeks to amend Section 93 of the Motor Vehicles Act, 1988 in order to provide statutory recognition to transport aggregators like Uber and Ola

New Delhi: Cleared by the Lok Sabha, the Motor Vehicles (Amendment) Bill is now being debated upon in the Rajya Sabha. Seeking 68 amendments and insertion of 28 new sections in the Motor Vehicles Act, 1988, the Bill touches upon various issues related to standards for motor vehicles, road accidents, insurance and driver licences. One of the important reforms it proposes to introduce is related to regulation and recognition of cab aggregators like Uber and Ola.

Currently, all taxi permits, including aggregators and radio taxis, are issued by state transport authorities. The 1988 Act allows the state transport authorities to attach additional conditions to these permits, such as the rate of fare, the maximum number of passengers and the requirement of meters. In accordance with this, states have framed their own guidelines for taxi operations.

What the Motor Vehicles (Amendment) Bill says about regulating ride-hailing companies like Ola and Uber:

1. The bill defines transport aggregators like Uber, Ola and Meru as a digital intermediary or market place for a passenger to connect with a driver for the purpose of transportation. The bill seeks to amend Section 93 of the Motor Vehicles Act, 1988, in order to provide statutory recognition to transport aggregators.

2. Since transport is a state subject, the new Bill allows these cab aggregators to obtain licences from state governments.

3. Licensing of cab aggregators is a major issue as the central government wants state governments to follow guidelines in this regard. The rule, if implemented, will allow a uniform licence code for cab aggregators across India.

4. Since these cab aggregators use technology as a platform to reach out to customers, the Bill also ensures that every such aggregator shall comply with the provisions of the Information Technology Act, 2000.

5. According to the Bill, cab aggregators are liable to punishment with fines between 25,000 and 1 lakh for violation of rules.

6. According to a Rajya Sabha committee report, cab aggregators should be held responsible for issues related to safety of women as they are the primary contractor.

7. On the issue of cab aggregators, the committee sought clarifications whether it would impinge on the right of the states to give permission as it was apprehended that corporate bodies like Uber and Ola would replace the three-wheelers/taxis run by individuals. It was clarified by the transport ministry that the aggregators were very much in the domain of transport services, but, in many states, they were refusing to be recognised as a transport agent.

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