The Motor Vehicles (Amendment) Bill, 2019, cleared by the Rajya Sabha on Wednesday gives power to the Centre to regulate app-based taxi hailing services to make customer’s cab ride experience smooth and hassle free.

In a first, the government has recognized and defined aggregators as digital intermediaries or marketplaces which can be used by passengers to connect with a driver for transportation, under the Motor Vehicles (Amendment) Bill, 2019. The Motor Vehicles Act, 1988, did not recognize cab aggregators as separate entity.

“Once the new law (motor vehicles act) is in place, the government will have the power to frame rules to regulate cab aggregators. We can keep an eye on surge or arbitrary pricing; make them offer better services for passengers, such as well trained drivers. We will also keep in mind the crucial aspect of women's safety," a senior government official told Mint.

After a long wait of about three years, the Rajya Sabha on Wednesday passed the proposed amendments to the Motor Vehicles (Amendment) Bill, 2019. The bill was passed by the Lok Sabha last week. However, the bill has to be approved by the both the houses once again to make minor changes in the proposed law. Thereafter, it will become a law after the President’s nod.

The proposed law aims to address crucial issues such as road safety, reducing deaths due to road accidents, imposing stiffer penalties on violation of rules, and weed out corruption in India’s road transport system.

"We welcome the Motor Vehicles Amendment Bill, 2019 which acknowledges that technology and innovation play a key role in transforming India’s mobility landscape. We will continue to support the government's vision to harness technology for shared mobility and safety," Uber spokesperson told Mint.

According to the government official, adding the word “aggregators" in the new law will give power to the Centre to frame guidelines for these companies and make the latter more compliant. The new law allows taxi aggregators to obtain licence from state government as it is a state subject.

An industry executive who did not wish to be named said that motor vehicles bill recognizing cab aggregators is a great move. “Under the (proposed) law, the Centre can now formulate a broad guiding policy, while states will have to frame its own policy. Until now, some states had policy for aggregators and some did not. Now the Centre has recognized taxi aggregators in the mobility platforms as a key stakeholder," the executive said.

Presently, many states lack norms to regulate taxis based on cab-hailing apps and radio taxis. Taxi permits are issued by the state transport department and as a result, every state has different guidelines which could include rate of fare, the number of passengers travelling in a vehicle, among others. In a recent incident, the Karnataka transport department revoked licence of Ola cabs after it was found flouting one of the cab aggregator norms, by allegedly operating two-wheeler taxi or bikes, without permission. States such as Delhi and Gujarat have suggested stricter guidelines pertaining to safety and pricing, among others.

While the Centre has amended the motor vehicles law, the states will now have to take it forward from here and frame policy and regulations depending on issues faced by the locals, such as congestion, among others.

Besides, violation of licensing conditions could lead to penalty between 25,000 and 1 lakh. They also need to comply with the Information Technology Act, 2000.

Ola did not respond to query sent by Mint on Wednesday night.

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