Transport Bill Likely to be Tabled in Budget Session

Times of India, February 19, 2015

Straight Drive Nitin Gadkari says use of a different platform doesn?t change essential nature of the transport business

The Indian government made its stand clear on taxi aggregators such as Uber and Olacabs that operate through mobile apps – they are not merely technology companies, they are also transport companies and need to be regulated as such. “Though transport is a concurrent subject, I believe they are in the transportation business and should be governed by the existing laws under Motor Vehicles Act” Minister for Road Transport and Highways Nitin Gadkari said on Wednesday during a meeting with ET journalists in New Delhi. Olacabs, TaxiForSure and Uber have said they should be classified as technology companies under the Information Technology Act.

Gadkari said that the use of a different platform didn’t change the essential nature of the business. ?If print media from tomorrow only starts publishing news on the Internet, does that mean you should not be regulated in future? Same way such (online taxi aggregators) should come under the Motor Vehicles Act,? the minister said. Taxi aggregators, having rapidly gained traction in the Indian market, came under a cloud after a woman customer was allegedly raped by an Uber driver in his taxi late last year. Services were suspended as it emerged that the driver verification system was faulty . Subsequently, taxi aggregators were pulled up for operating in what some authorities regarded as a regulatory grey area.

Uber applied for a radio taxi licence last month in Delhi under new rules, but was asked to change its status from that of a technology company to that of a transport provider, ET reported on January 29. A top Delhi transport department official said such a change was critical. ?When a crime happens in a cab it’s not a cyber crime, it’s a physical crime. Such companies can’t go scot free citing themselves just as technology companies,? the person said.

While the Uber application is still pending, the company has resumed services after adding safety features to cars such as a panic button. Uber has been given a week to rectify deficiencies and modify its application. Olacabs’ application is being examined, a department official said. NTL Taxi has, meanwhile, been given a radio taxi licence by Delhi.

The aggregators argue that they offer a mobile application for cab booking, bringing customers and drivers together. “It is essential that our business model is understood. Existing regulations require amendments to ensure the aggregators’ views are incorporated to make them holistic, and not skewed to one particular business model,” said Aprameya Radhakrishna, co-founder of TaxiForSure.

Legislative clarity may be needed to shore up the government’s argument, experts suggested. “Until the Motor Vehicles Act is amended to include e-commerce trade, these technology platforms do have an argument to contend with – they do not own the cabs,” said Lalit Kumar, partner at law firm J Sagar Associates. Some experts said laws should be updated and made clearer for such intermediary platforms that are employed in online retail, taxi bookings and airline ticketing so that such modern marketplaces can operate freely.

“Any ministry can issue appropriate jurisdiction framework as a sectoral regulator under Section 79 of India’s Information Technology Act. The transport providers can be called to provide information in case of an incident in such cases,” said Suhaan Mukerji, partner at law firm PLR Chambers, a consultant for various technology platform companies on India business strategy.


Gadkari’s ministry is expected to present the draft Road Transport and Safety Bill in the Parliament in the budget session. Among other things, this prohibits hand-held mobile phone use by drivers in any way. It’s unclear how or whether taxi aggregators will have to change their models, since all of them are based on mobile applications that are fundamental to operations. The app is used by drivers to accept bookings, map trips, seek directions and bill passengers.

The minister touched on other issues during his interaction, although he declined to be drawn on the reasons for the Bharatiya Janata Party’s defeat in the Delhi assembly polls. He backed Prime Minister Narendra Modi’s statement on Tuesday about the government defending religious freedom. But he added that the BJP was being wrongfully targeted on issues of intolerance.

“Justice to all and appeasement of none – we will not do discrimination on basis of caste, religion but they want to taint us as saffron party,” he said. Gadkari said he was willing to advise Delhi’s new chief minister Arvind Kejriwal on how to go about achieving lower electricity tariffs. “The issue is not about cheap power but about how we make it available at cheap rates,” he said. “If Kejriwal comes to me, I will show him the way. Instead of 400 MW, if the government had invested for getting 1,500 MW of power then it would be getting this amount of power for Rs 1.19 which could be given at Rs 2.50.” Gadkari had this to say on the question of water supply to the capital: “On the issue of drinking water, I had suggested that in Wazirabad, from Delhi to Agra, I have to build inland waterways. I said we can make another barrage which will double the capacity of water for Delhi. Recycle the water in Delhi and sell it to industry.” Programmes needed to be backed up by sound economics, he said.

“Without any plan to say that you will give this or give that free… After giving all the subsidy, where will be the money to run the government,” he asked. “This is a test for them (the Aam Aadmi Party government in Delhi). If they don’t buy cheap, they cannot give power cheap.” (With inputs from Rakesh Mohan Chaturvedi).

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