Bengaluru: In a temporary reprieve for ride hailing services such as Ola (ANI Technologies Pvt. Ltd) and Uber Technologies Inc., the Karnataka government on Wednesday said it will stop coercive action, including impounding cabs affiliated to these services until 20 June for allegedly plying without relevant licences, though crackdown against surge pricing will continue.

The state transport department’s submission before the Karnataka high court (HC) came while the court was hearing a petition filed by drivers affiliated to Ola and Uber against the department’s Saturday statement that aggregators who are yet to obtain licences should immediately stop operations.

In a statement issued on Saturday, the state transport department said the government has implemented the Karnataka On-demand Transportation Technology Aggregators Rules 2016, which requires businesses to hold “effective licence issued to them under these rules".

“Web-based aggregators had to obtain licences to operate cabs and taxis. But many aggregator companies have not obtained licences, but are operating such cabs. This is a gross violation under sec-93 r/w 193 of the Motor Vehicles Act. Hence, companies which have not obtained licences from the concerned authority should stop operations with immediate effect otherwise strict action will be taken against such operators," the statement said.

Since 2 April when the new rules were notified, close to 1,000 cabs were impounded and later released on payment of fines, government officials said.

The sustained crackdown and the latest directive warning the likes of Ola and Uber to stop operations led to protests by drivers affiliated to the companies on Tuesday. Some of these drivers moved the Karnataka HC on Tuesday.

In the petition, the drivers contended that certain measures mandated by the rules, such as installation of digital fare meters capable of printing a receipt and illuminated boards with a taxi sign are financial burdens. They also contended that clauses mandating that drivers should be a resident of Karnataka for at least two years or have knowledge of Kannada have “no rational nexus with object of the Act".

The drivers also contended that the upper cap on fare fixed by the government, a move to arrest surge pricing, does not take into account factors such as time spent on each trip, which needs to be taken into consideration in the wake of traffic bottlenecks.

Uber has also filed a separate petition with the Karnataka HC on Wednesday, objecting to certain clauses in the Act.

The company confirmed that it has filed a petition but declined to comment further.

Uber has stated in the petition that the government “appears to be coming up with new requirements on a daily basis, bordering on the absurd".

The company contended that it is merely a technology platform connecting drivers with consumers.

To be sure, this is not the first time these companies had a run-in with the government. In fact, they have run into regulatory hurdles in all of three biggest markets in India: Bengaluru, Delhi and Mumbai.

In Karnataka, the transport department first cracked down on bike taxi services offered by Uber and Ola and then impounded vehicles to arrest surge pricing.

Both companies have since withdrawn bike taxi services, which was launched in March. They, however, continue with surge pricing, where a consumer is charged multiples of the actual fare when demand is high.

The state transport department has conducted multiple raids, impounding cabs for surge pricing on consumer complaints.

Surge pricing became a bone of contention in Delhi and Maharashtra as well.

The Delhi government had threatened to crack down on Ola and Uber if they did not stop surge pricing, after a series of consumer outbursts on social media, especially in the wake of implementation of the odd-even rule in Delhi.

Uber and Ola temporarily suspended surge pricing on 18 April. The decision came after a notice issued by the Delhi high court to the state government to look into the allegations of “over-pricing" rides, Mint reported on 19 April.

The Maharashtra government may also make a move to abolish surge pricing by 15 June following strikes by the black and yellow taxi drivers who alleged that surge pricing gave an unfair advantage to aggregators such as Ola and Uber, the Business Standard newspaper reported on 26 May.

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