- Fight in Indian tech hub adds to global regulatory battle
- Rules seek digital printers, panic buttons, taxi signage
Uber Technologies Inc. is seeking a review of new rules in Bangalore covering the ride-hailing industry, adding a new chapter to its global battle with regulators.
Karnataka, Bangalore’s home state, is requiring ride-hailing startups to provide digital printers, install panic buttons, have taxi signage and provide a feedback register for passengers. The rules are “not only regressive, but also practically impossible to comply with,” Uber said in a June 4 letter to the transport minister, a copy of which was provided to Bloomberg News.
The battle in India follows run-ins with regulators from France to California as the San Francisco-based startup comes up against entrenched competitors such as taxi operators. Uber, which raised $3.5 billion from Saudi Arabia’s sovereign wealth fund this month, has said India is a strategic market and the company plans to continue to invest in the country.
While India’s federal government has already laid down a broad policy framework for the ride-hailing segment, each state devises its own policy to regulate startups. So far, Uber has only received a license in the eastern city of Kolkata. States where the cities of Mumbai and Delhi are situated, are still drafting the rules.
Uber said challenges are to be expected but the new rules create hassles, with printers and feedback registers superfluous when e-mail receipts are promptly provided and complaints through the app or e-mail are resolved within a couple of hours.
“These kinds of rules add unnecessary paperwork, unnecessary costs and take us back to the analog era,” said Bhavik Rathod, general manager of Uber in Bangalore. “Uber is in 450 cities in 70 countries, we face unique environments everywhere and have hyper-local country teams working with local regulators.”
The company said it applied for a license in Bangalore with all the required documents but its application hasn’t been accepted. In recent months, Uber and its home-grown rival Ola have faced vehicle impounding and court cases. Two weeks ago, drivers staged a snap protest against the authorities on the busy city-to-airport road.
“These startups come under our new aggregator rules and they have to follow them, they cannot exploit the traveling public,” said Rame Gowda, the government’s Bangalore-based commissioner for transport & road safety.
It’s not Uber’s first run-in in India. A New Delhi court has ordered Chief Executive Officer Travis Kalanick and India President Amit Jain to appear after authorities charged the company under rules that forbid operating as an “agent” or “canvasser” without a license.
Bangalore, home to 10 million people and the country’s technology hub, has taken quickly to ride-hailing. Uber said the city, its entry point into India three years ago, is growing 40 percent month to month and is a top three market for the company in India.
Rahul Matthan, a partner at Trilegal, said many traditional businesses have been challenged by new digital players and governments around the world are struggling to come up with new laws to regulate them.
“Instead of coming up with entirely new frameworks, governments are trying to pigeon-hole new startups into old regulations,” he said.