Karnataka HC rejects Uber’s plea against State’s cab aggregator laws

The long drawn legal battle between Uber and Karnataka state government has been decided in favour of the latter by the Karnataka High Court upholding the state government’s rights to frame such rules and certain clauses contested by Uber.

The Karnataka government had notified the Karnataka On-demand Transportation Technology Aggregators Rule, 2016 on 2 April, which among other things, made it mandatory for ride-hailing services to get a permit before operating in the state. Uber challenged government’s authority to frame such rules and took the legal course.

The high court not only said that the state was within its rights to frame such rules but also upheld certain provisions contested by Uber, including one that mandated that drivers should be residents of Karnataka for at least two years and should possess working knowledge of Kannada language, all vehicles should be fitted with panic buttons and drivers need not work beyond eight hours a day.

Karnataka government was the first state to lay down regulations for cab aggregators under the Transportation Technology Aggregators Rule, 2016. This has now been emulated and implemented by Maharashtra, Delhi and West Bengal.

American cab aggregator has now been granted a month’s time to comply with the regulations and obtain a license to operate in the state.

Meanwhile, for the surge-pricing issue, the court maintained a status quo for the contentious issue implying that while Ola and Uber can implement surge pricing, they cannot exceed the Rs19.50 cap per km, including wait time charges, which is Re1 for every minute.

The court also maintained that a criminal complaint filed against a driver is no ground to cancel the aggregator’s license. The judge also struck down rules related to having a minimum fleet of 100 vehicles and the state demanding personal information about passengers. Also, the cab aggregators now don’t need to deposit Rs 1 lakh to register up to 1,000 taxis.