Ola, Uber services in Karnataka set to face a major blow

In a move that might result in a clampdown on taxi services provided by Ola and Uber, the Karnataka State Government has implemented the Karnataka On-demand Transportation Technology Aggregator Rules 2016, according to a statement that was issued on 28 May.

According to the Karnataka On-demand Transportation Technology Aggregator Rules 2016, businesses have to hold the requisite licences. Taxi aggregators who are yet to obtain relevant licences will be required to stop operations, with immediate effect.

"Web-based aggregators had to obtain licences to operate cabs and taxis. But many aggregator companies have not obtained licences, but are operating such cabs. This is a gross violation under sec-93 r/w 193 of the Motor Vehicles Act. Hence, companies which have not obtained licences from the concerned authority should stop operations with immediate effect otherwise strict action will be taken against such operators," the statement said, according to a report in Live Mint.

The Karnataka On-demand Transportation Technology Aggregator Rules 2016, lays down that "no person shall act or permit any other person to act as an aggregator unless he holds an effective licence issued to him under these rules".

This move would adversely affect Ola and Uber's business in the state, Bengaluru being one of the biggest markets for the services they provide.

This isn't the first time that the taxi service providers have faced challenges in the state of Karnataka. The state transport department had previously impounded vehicles to control surge pricing, and had also put restrictions on bike services that had been launched.

The Karnataka On-demand Transportation Technology Aggregators Rule lays down that aggregators cannot charge passengers more than the fare fixed by the government.