Uber and Olacabs banning may lead to controversy



Uber and Olacabs banning may lead to controversy and unnecessary tussle between departments of transport in state and central government of India. Recently transport department of Delhi has asked the information and technology ministry to block the IP address of Uber and Ola cabs.

After unfortunate incident of rape by Uber cab driver, Delhi Transport ordered banning of app based taxi operator. Uber faced various legal hurdles even in other countries too. Transport department asked Uber, Olacabs and Taxi For Sure to apply for licence under Motor Vehicle Act and not to run business under Information Technology Act.

Uber, Olacabs and other app based radio taxi operators applied for licence under Motor Vehicle Act. However the applications are pending approval with transport department. Meanwhile the taxi operators are operating their services and providing service to customers.

Radio taxi-Uber-Ola

Transport ministry of India is stating has asked states to allow US based online radio taxi booking companies Uber and its rival Ola to operate. One of the Transport ministry based on anonymity said “We see that these companies are bringing value to the economy and the people” and further stated “Any innovation in technology should not be banned.”

Most of the app based radio taxi operators have several safety features in their vehicles such stricter background of all the drivers by external agencies and also checking of behaviour of the drivers, mandatory drivers, GPS location, Panic Button, separate line of cabs for lady passengers driven by lady drivers.

Of late India’s taxi services market despite its financial stress, has received attention from global investors. Due to fast growth and reliable form of public transport most venture capitalists are investing on these companies. On April 09, 2015, Olacabs received latest funding from Russian Venture capital company DST Global and few others for a whopping amount of $315 million.

uberola-combine logo

Olacabs has been value at $2 billion and adding several other services like OlaCafe – delivery of food from the restaurants to users place in certain localities in cities like Bengaluru, Hyderabad, Chennai and others.

Uber too have launched their auto rickshaw services thru UberAUTO on April 09, 2015. Need to be seen how these companies survive despite the hurdles in the sector.