Karnataka High Court Stays Service Ban On Ola, Uber, Rapido

Auto aggregators such as Ola, Uber and Rapido, in Karnataka have got a big relief from the ban imposed by the State Transport Department over charges of extorting money from people. The Karnataka High Court granted an interim stay to the order given by the Transport Department and ordered the state government to fix fares as per relevant law. Moreover, the court ordered the state officials to not take any coercive action against the auto aggregators until it submits a report within 10 to 15 days about the additional service charge. The hearing related to this case has been postponed till November 7, 2022.

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“We welcome the court’s order, which recognizes that auto drivers have the right to operate using aggregator platforms. It also recognizes that platforms like Uber can charge a booking fee, which allows them to cover their costs and continue to provide their services,” Uber’s statement said.

Moreover, the Karnataka HC has also allowed the auto aggregators to charge 10 per cent over the base fare as a convenience fee along with 5 per cent of GST as a temporary rule before the authorities come up with a plan. Earlier, the auto aggregators were charging a flat rate of Rs. 40 per ride as a convenience fee. In response, Uber’s spokesperson in a statement said, “Commission caps threaten the viability of this vibrant e-hailing sector, which will impact tens of thousands of auto drivers who rely on it for their livelihoods and will result in the shrinking of this fledgling category.”

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While Rapido, a bike taxi aggregator and logistics service provider based out of Bengaluru did not file a petition. However, the legal representatives of both Ola and uber argued that the notice dated October 6 by the Karnataka Transport Department violates the rights of auto drivers as per the Karnataka On-Demand Transportation Technology Aggregator Rules, 2016.

Moreover, the move is in stark contrary to the direction issued by the division bench of the High Court in December 2016 asking the government not to take any coercive action for violation of the rules while the appeals are awaiting adjudication on the validity of the rules. However, the advocates representing the auto aggregators said at least 20 per cent additional charges are necessary for the services to operate while offering equal remuneration to the auto drivers. Yet, the court stuck with its previous order to charge 10 per cent over the fares until the matter is resolved.