Karnataka High Court upholds validity of state law governing app-based taxies

Watch What Else Is Making News

In his 260-page judgment Justice Raghavendra S Chauhan, who personally travelled in app-based taxis this September to test the validity of some of the safety provisions in the new law, has struck down several clauses of the Aggregators Rules of 2016, but upheld its overall Constitutional validity, including the state’s powers to frame the rules.

The Karnataka On-demand Transportation Technology Aggregators Rules, 2016, which came into force on April 2, 2016 in Bengaluru to regulate the operations of taxi aggregators like Uber and Ola Cabs was challenged by Uber India Technologies as being unconstitutional and anti-technology. The rules lay down conditions for taxi aggregators to receive licenses for operating in Bengaluru. Uber is yet to be licensed in Bengaluru while others like Ola have received licenses.

One of the areas of contention in the licensing rules was a curb on surge pricing. Uber has argued that policies like surge pricing or peak pricing during periods of heavy demand help increase taxi availability for passengers when taxis are not available in any part of the city. During the hearing of the case Uber, however, agreed to stay within maximum price limits prescribed by the state and on the basis of a consensus between the aggregator and the government the high court stated on Thursday that it would not need to interfere on the issue of surge pricing.

In one of the significant portions of the judgment Justice Chauhan has ruled that cab aggregators fall within the purview of the definition of “canvasser’’ as stated under section 93 of the Motor Vehicles Act 1988. “The argument that Uber “merely offers a technology platform, and merely facilitates and connects the passenger and the taxi driver” is a hypnotic illusion which cannot be accepted. In the face of the evidence, it is both untenable and unacceptable,’’ the court said. The court has struck down rule 10 (c) and 10 (v) of the Aggregator Rules which made it mandatory for taxi service providers to maintain records of all trips for upto a year and make it available to the state on demand.