Paras Jain/Mint
Paras Jain/Mint

How app-based cab rides are set to get smoother

Mint looks at how The Motor Vehicles (Amendment) Bill, 2019, will impact cab aggregators

Ola and Uber are now an integral part of our daily routine. Their impact on employment, mobility and the falling sales of automakers is all too evident. Mint looks at how The Motor Vehicles (Amendment) Bill, 2019, will impact these cab aggregators.

What does the motor vehicles bill say about cab aggregators?

It’s the first time cab aggregators have got statutory recognition as “digital intermediaries" or “transport aggregators". They are now defined as marketplaces that can be used by passengers to connect with a driver for moving from one place to another. The Centre will issue broad guidelines from time to time and the states will rely on them to frame their own rules to regulate the industry. The aggregators will also have to comply with the provisions of the Information Technology Act, 2000. This means they will have to follow rules on storing data safely to protect the identity of users.

Why is it important to regulate them?

Cab aggregators touch our daily lives in many ways. Their service has made personal transportation more affordable and easier, especially against the backdrop of the rising cost of car ownership due to pricey fuel, high parking fees at most places and increasing cost of maintenance. Their service also raises questions about safety and security, particularly for women, amid reports of cases of rape and harassment by drivers. There are also complaints about drivers not following the map, improper billing, the interiors of the vehicles being dirty, drivers wearing indecent clothes and misconduct by cab aggregators.

What are the penalties that violators will face?

Violation of licensing terms under the Motor Vehicles Act will invite fines between 25,000 and 1 lakh. Under the IT Act, fines can vary from 5,000 daily to 1.5 lakh for every failure.

What are the changes one can expect?

The new law seeks to promote effective competition, passenger convenience and safety, while seeking to prevent overcrowding. Aggregators may find it difficult to fleece customers through surcharges during peak hours or in times of adversity such as a bus or auto strike or during heavy rain. The changes will benefit firms that face ad-hocism in policy in some states as this is unlikely to happen once the law is enforced. The law will place greater responsibility on service providers to do better security audits of drivers.

What has the Supreme Court said?

On Wednesday, the Supreme Court asked the Centre to consider framing a law to regulate app-based taxi service providers to ensure the safety of women passengers. The Motor Vehicles (Amendment) Bill, 2019, awaits the formality of being passed by the Lok Sabha before the President signs it into law. The court will then decide whether the law takes care of citizens’ concerns. If it feels the law is not adequate, it may ask the Centre to incorporate more measures in the Act or frame a separate legislation.

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