Home / Companies / Start-ups /  New Maharashtra rules to hurt operations: Uber

The Indian unit of Uber Technologies Inc. has objected to some clauses in the Maharashtra City Taxi Rules 2016, released by the state government on 15 October to regulate app-based ride-hailing services, saying the rules will make operations expensive and hurt the quality of service.

Uber and rival Ola have been at the receiving end from traditional transport service providers such as kaali peeli (black and yellow) taxi drivers and autorickshaw drivers because of their aggressive pricing strategy.

The Maharashtra government has mandated that the ride-hailing services be registered under the new rules to operate in the state. The rules say that at least half of a ride-hailing company’s fleet should have engine capacity in excess of 1,400cc, and the vehicles should ply on “clean fuel" such as unleaded petrol or compressed natural gas.

The rules also seek to implement a dress code for drivers and a colour code for cars registered under the rules, among other things. The state also seeks to regulate fares charged by the services in an attempt to curb surge pricing, wherein ride-hailing services increase fares when demand exceeds supply.

“The licensing authority shall prescribe the minimum and maximum limit for rates of fare, with respect to vehicles operating under permits granted under these rules, which will be decided as per type of vehicle, provided that no such limits may be prescribed for vehicles with engine capacity of 2,000cc or more," the rules state.

In a letter to chief minister Devendra Fadnavis dated 21 October, which was reviewed by Mint, Uber’s head of public policy in India, Shweta Rajpal Kohli, said such rules are likely to make Uber’s service “expensive and unreliable".

“The rules suggest that ride-sharing apps should ensure half the fleet of cars on the platform are over 1,400cc engine capacity. This push towards more premium cars will mean more economical and fuel-efficient ones will be pushed out from the platform. It will also take away the freedom and flexibility of drivers to have the vehicle of their choice, forcing them to buy more expensive cars, which will in turn push up fares," the letter said.

The letter also raised objection to the price of permits, to be paid for by drivers—Rs25,000 for cars with less than 1,400cc engines and Rs261,000 for those with more than 1,400 cc engines—and a deposit of Rs50 lakh for 1,000 cars to be paid by ride-hailing services.

Uber did not respond to an email seeking comment on the letter. Ola did not respond to an email seeking comment on its stance on the new rules.

Bengaluru, Delhi and Mumbai are three of the biggest markets for ride-hailing services in India—a bumpy ride in any of these cities could hurt their businesses.

Uber has taken the Karnataka government to court over the Karnataka On-demand Transportation Technology Aggregators Rules 2016, notified on 2 April. Uber said in the petition that the government “appears to be coming up with new requirements on a daily basis, bordering on the absurd", Mint had reported on 2 June.

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