Ministry of Road Transport Issues Advisory on Taxi Aggregator Apps

Written by Siddharth Manohar

The Ministry of Road Transport and Highways’ recent advisory contains detailed guidelines for internet-based taxi aggregators (also known as ride-hailing apps) and their continued operation in India. An interim order by the Delhi High Court in July had banned the operation of such services in Delhi, and this advisory has been welcomed by the companies operating in the market.

Road transport remains a subject under List II of the Constitution, which means that only State governments (as opposed to the Union Government) are allowed to enforce policy regarding any matter falling under it. As highlighted in the statement of the Secretary of the Ministry, Vijay Chhibber, the object of the advisory is to regulate taxi services offered by app-based providers such as Uber and Ola as effectively as regular taxi companies. The advisory, he said, would “clear the air for states to form their own rules, treating them at par with other cab fleet owners”. Being a mere advisory, it has no direct penal consequences even if the service providers do not comply with the guidelines. However, it does act as a model for states to develop their own regulations, along with the power to punish for non-compliance.

The guidelines go some way towards solving certain headaches caused by the application of the Radio Taxi Scheme, 2006 to ride-hailing internet applications. The plea of taxi aggregator companies at the time of the ban had been that their service was essentially different from a regular taxi company and they could not be shoehorned into the older regulatory scheme designed for conventional taxi companies. The drivers, for instance, are not direct employees of the taxi aggregator company. Therefore, the rule in the Radio Taxi Scheme that holds the employer of the driver responsible for the actions and safety of the driver would not be applicable to taxi aggregators.

 To deal with this, the new guidelines specify the required background checks and registration documents to be acquired by the company upon registration of the driver with the service. It also requires the operators to carry out a training program for its registered drivers. This takes into account the difference in operation of these companies but nonetheless sets down the same regulatory standards for the operation of the taxi service.

 The guidelines take the useful step of disallowing drivers registered with the service or vehicles used by them to advertise themselves as a regular taxi vehicle. The document also puts restrictions on the companies in terms of mandating any kind of minimum hours of driving to be registered with the service, and also mandates following rules of maximum number of driving hours, to ensure driving safety. It also prevents companies from restricting drivers registered with the company from registering with other taxi aggregator services. These measure put greater bargaining power in the hands of the drivers registered with the service and avoids anti-competitive practices like preventing a driver from opting for a different service which offers better incentives for completing a certain number of rides on a given day.

 The advisory also contains a host of requirements geared towards passenger safety. Firstly, the comprehensive rules regarding registration and permit documents for the driver and vehicle play a role in boosting accountability. The steps of registration include a police verification of drivers who are to be involved with the service. It disallows the company from registering persons who have been convicted during the past seven years for driving under the influence of alcohol or drugs, or for any cognizable offence, including sexual offences, terror-related offences, and property offences. The guidelines include requirements of detailed information regarding the driver and vehicle to be provided on the platform to users of the service, and for this data along with the location data to be transferred to two trusted contacts, apart from their being transferred to the authorities when required. For this purpose, all vehicles are to be fitted with location tracking technology, apart from standard first aid and safety equipment as prescribed in relevant laws.Further, in case of a complaint of discriminatory practices filed against any driver, it suggests that the driver be suspended from accessing the service until such time as internal investigations regarding the matter are still ongoing.

 The advisory also takes up some useful administrative requirements. It demands that the service operator incorporates an legal entity within India. It makes mandatory an Office address ineach state where the company operates, along with an assigned in-charge, for easier service of notice for purposes such as Court proceedings. It also requires a comprehensive list of all drivers and their associated vehicles and details to be submitted to the Licensing Authority on a monthly basis It mandates that the company must provide for a 24*7 helpline along with a call centre for the same, as well as a web-based portal, for grievances of customers to be communicated.

 Dealing with these different aspects of regulation of taxi-aggregators, the advisory has struck some kind of middle ground between those that complain that these services are bypassing accountability measures and ignoring customer safety, and the companies who argue that while customer safety and quality of service remain important, existing rules of commercial road transport services cannot be applied to them as is. One hopes that the State governments now take up the clear regulatory call sent out by the Ministry and set about framing legislations which enforce the provisions laid down in the advisory document. The Karnataka State department has been reported to come out with the relevant policy soon, and, if so, will be the first instance of authoritative regulation on the matter as a thought-out response.

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