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Are Bike Taxis flouting Commercial Norms?

The problem of bike taxis violating norms in Chandigarh was recently brought up highlighting that these businesses were undertaking commercial activities without required permits. The reports stated that operators like UberMOTO and Rapido are violating motor vehicle norms and running their business without proper commercial licenses.
Written by:
Shivi Gupta
Published on
24-Jul-18

The problem of bike taxis violating norms in Chandigarh was recently brought up highlighting that these businesses were undertaking commercial activities without required permits. The reports stated that operators like UberMOTO and Rapido are violating motor vehicle norms and running their business without proper commercial licenses.  

Uber introduced UberMOTO about a year ago, branching its operations in 7 major cities including Bengaluru, Gurgaon, Noida and Ghaziabad. Ola bike services are also functional in 11 cities across India. Mobile app-based taxi aggregators that provide their services on an on-demand basis have changed the urban transport system in the past few years. The Central and State Governments have an active responsibility to amend the existing laws and enact new laws to regulate these businesses.  

Uber had previously talked to various State Governments seeking permission for bike-taxis. However, authorities in many cities rejected the application. In Bengaluru, Uber and Ola bike services were halted as the officials seized the bike-taxis on the grounds that these companies didn’t have the requisite permits. 

However, draft guidelines issued by the Central Government in December 2016 gave a huge boost to these transport companies. Under these guidelines, the State Government has the power to draft their own transport regulations. Since December last year, Telangana, Rajasthan and UP have authorised and approved commercial bike taxi services.

Till 2015, Goa was the only state that allowed bikes as a public service vehicle. This was soon followed by Haryana, which introduced bike as a public service vehicle, where two-wheelers can be registered as commercial vehicles.

Under the guidelines, for 'economical and convenient last mile connectivity solution to the citizens', the State Transport Department may allow 2-wheeler taxi permits on the same conditions for granting permits for city taxi. Private bikes may be allowed to be used as bike taxis and the state government may utilise an online option for allowing private bikes to convert as taxis.

 

To start a bike taxi business, the following legal requirements have to be fulfilled: 

The business has to be registered as a company under the Companies Act, 2013, a partnership, or a limited liability partnership (LLP).  Compliance with GST tax implication must be completed.  The registered business must get the necessary motor vehicle permits and adhere to the motor vehicle rules and laws in India.  The business requires an association with an insurance company for motor vehicle insurance. Compliance with the Labour and Industrial laws must be completed. 

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