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Centre bans unlicensed cab services across India

In a sign of deepening trouble for US-based taxi services company Uber, the Prime Minister’s Office (PMO) on Tuesday stepped into the investigation into the alleged rape of a 27-year-old executive by an Uber driver in Delhi on Friday, with National Security Advisor Ajit Doval speaking to senior police officials and seeking a report.

It is expected Doval will brief Prime Minister Narendra Modi on the matter.

Home Minister Rajnath Singh on Tuesday announced in Parliament he had advised all states and Union territories to ban unlicensed cab services. Uber, as well as other web-based taxi aggregators such as OlaCabs and TaxiForSure were banned from operating in the national capital on Monday.

Following the Centre’s diktat, almost all states swung into action. The Karnataka transport authority asked taxi aggregators to procure operator permits and instructed them to ensure their drivers were verified by the police by the end of the month. Chandigarh declared only three radio taxi operators as authorised – Mega Cabs, RBTS and Fab Cabs. Mumbai ordered all 28 private cab operators in that city to provide data on their drivers. In Mumbai and Jaipur, background checks would be carried out for drivers of regular black-and-yellow taxis, too, the police said.

However, despite a first information report, a ban and the possibility of criminal liability, Uber seemed undeterred. In a late night press conference on Tuesday, Allen Penn, head of the company’s Asia-Pacific operations, dodged all questions about how the ban would be imposed, the company’s strategy to deal with the charges and the future of the company’s operations in India.

He said Uber felt it was completely compliant with Indian regulations, adding this was why it was continuing to operate in Delhi and elsewhere. But the company was keen to have a dialogue with the authorities to work out a solution to some of the issues, he said.

On the ban on the company’s operations, Penn said, “We’re still trying to get the details on what it entails. We respect the government and the regulations, but there is a conflict between new-age technology platforms and regulations governing them, which are old.”

Defying the ban by the Delhi authorities, Uber and some other ‘unauthorised’ radio taxis zipped across the capital’s roads on Tuesday. Sunil, a driver with Uber, said there had been no communication from the company about the ban, adding the drivers “do not know what to do about it”.

Delhi traffic police constables issued challans to drivers of banned taxi operators found plying in the city.

To receive the latest details on the case, Rajnath Singh summoned Delhi Police Commissioner BS Bassi to Parliament. Addressing the media, Bassi said police officials were examining the liability of Uber, as well as the action that could be taken against the American on-the-go taxi platform.

While the PMO and the home ministry are signalling serious action, Road Transport Minister Nitin Gadkari is reported to have disagreed with the decision to ban Uber, suggesting halting any transport service caused inconvenience to the people.

Uber, backed by investors such as Goldman Sachs, Google Ventures, Menlo, First Round, Lowercase Capital and Benchmark, found support from many quarters, with many arguing the company should not be punished for the act of an individual. Five-year-old Uber, which operates across 200 cities worldwide, is seen as a promising venture for its investment and employment-generation potential.

A civil servant argued Uber couldn’t evade responsibility because it was the company that had put together this particular model of service and safety of users was its primary responsibility. “For that, one of the essentials is drivers must be trustworthy, with the minimum requirement that there should be no record of crime. In the current incident, the driver in question is a serial offender.” He added one couldn’t seek refuge behind gaps in law because the state had residual powers to deal with matters not covered by laws in force. “Executive orders by the Ministry of Home Affairs or state governments can impose any conditions considered appropriate,” the official said.

Beyond India, the US city of Portland sued Uber on Monday to stop it from operating in Oregon city until it followed local regulations. Thailand’s department of land transport on Tuesday said Uber was operating illegally in the country and ordered it to halt its services immediately.

Uber entered India in August last year. In just about a year, the country became the company’s largest market outside the US. These developments are likely to hit the company’s soaring valuation, pegged at $ 40 billion. A few days ago, Uber had raised $ 1.2 billion in fresh funding.

Even as their taxis continued to ply on Delhi roads, executives of Uber, OlaCabs and TaxiForSure, were silent. Founders OlaCabs and TaxiForSure, didn’t respond to calls.

In an email statement on Tuesday evening, TaxiForSure said it “had not received any official communication from the Delhi authorities on stopping our partner vehicles. We will work with the government to ensure the convenience and safety of the people, especially women”.

Meanwhile, ‘licensed’ radio taxi operators pleaded with commuters not to paint the entire industry with the same brush. “After the incident, all radio taxi operators are being labelled unsafe, which is not correct,” said Rajesh Munjal, director of operations, EasyCabs.

Radio taxis had already started witnessing a fall in bookings, said Kunal Lalani, chief executive of Mega Cabs and president of the Association of Radio Taxi Operators. The Delhi transport authorities had ignored a warning by the association in September this year against players such as Uber and OlaCabs, which were operating without licences.

On Uber’s website, the company’s co-founder and chief executive, Travis Kalanick, famously states, “Every problem has a solution. You just have to be creative enough to find it.” Indian authorities might have read it, too.


Kavita Chowdhury contributed to this story.

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