- Rival Ola also has service stopped in dispute over permits
- Once confiscated, vehicles can only be released by a court
Uber Technologies Inc. and Indian rival Ola had their motorcycle taxi services halted in the Indian city of Bangalore following a ban and vehicle seizures by transport authorities.
There have been 62 Uber motorcycle taxis confiscated along with 24 vehicles from other operators, said Rame Gowda, the Bangalore-based commissioner for transport and road safety. The two companies have ceased services and the seized vehicles can only be released by a court, according to Gowda.
Uber and Ola started their motorcycle taxis within hours of each other this month, taking their rivalry for passengers to the Indian city’s gridlocked streets. UberMOTO was the San Francisco-based company’s cheapest transport option with a base fare of 15 rupees (22 U.S. cents) and a tariff of 3 rupees per kilometer.
“Uber, Ola and others have not obtained permits from the Road Transport Authority to offer bike taxi services,” Gowda said. “They have to get the requisite permission and then carry badges and yellow license plates, otherwise it is a serious violation.”
Uber didn’t respond to phone calls and an e-mail from Bloomberg News seeking comment on the ban. On Tuesday, its app showed a “No MOTOs available” message for UberMoto in the city. Ola’s app has stopped displaying the OlaBike option. A spokesman for Ola declined to comment.
Both Uber and Ola are going head-to-head in the Indian market, where each is trying to dominate car-hailing and foraying into other vehicle segments. Ola also allows customers to hail three-wheeler auto rickshaws. Uber launched a three-wheeler hailing pilot for a few months in Gurgaon last year.
While Uber and Ola had their business halted, other services are still operating in Bangalore, where motorcycles are a popular transport option because they can weave in and out of traffic. The city officially known as Bengaluru is home to India’s high-tech sector and is the country’s startup capital.
Startup Rapido has 400 two-wheelers registered on its app and has worked closely with the local government to offer only ride-sharing, rather than taxi services, until rules change. It doesn’t charge the driver, with its rides costing 5 rupees per kilometer and a 10-rupee booking charge.
“Bike taxis are the common man’s ride, the government has to re-look at the regulations,” said Aravind Sanka, founder of Rapido. The company is working with the transport authorities of Karnataka state -- of which Bangalore is the capital -- to draft bike taxi rules in India and is starting two-wheeler ride-hailing services in Gurgaon next week.
India’s Motor Vehicles Act pre-dates Internet businesses. The legal issues surrounding the use of two-wheelers for commercial purposes go beyond the motorcycle aggregators and encompass such two wheeler-fueled segments as pizza delivery and e-commerce logistics.
Under the current laws, two-wheelers can’t be used to carry passengers for hire or reward, or goods other than personal effects, said Mohammed Dastagir, a lawyer who was formerly a law officer with the transport department in Bangalore.
“If the two-wheelers are found ferrying passengers or carrying large items for delivery, the authorities can come down heavily," he said. Dastagir said India has readied a new bill that if approved by Parliament, would bring in many changes, some of which will benefit e-commerce firms.
(An earlier version of this story corrected Rapido’s name in the eighth paragraph.)