The bike taxi sector in India is currently valued at USD 50.5 Million and is expected to grow to USD 1.4 Billion by 2030. The reason for this growth lies in bikes being an economical alternative to all other types of taxis. However, this aggressively expanding industry has been facing its fair share of regulatory struggles. On 19th February 2023, the Delhi government issued...
The bike taxi sector in India is currently valued at USD 50.5 Million and is expected to grow to USD 1.4 Billion by 2030. The reason for this growth lies in bikes being an economical alternative to all other types of taxis. However, this aggressively expanding industry has been facing its fair share of regulatory struggles. On 19th February 2023, the Delhi government issued newspaper advertisements asking digital companies such as Ola and Uber to stop allowing personal bike taxis citing violation of city rules. A similar situation has ensued in many other states as well. The decision of the Maharashtra government was also challenged in both the Bombay High Court and the Supreme Court of India. However, no interim relief was granted. Such bans, even though understandable, are due to a lack of regulation. They are affecting the livelihood of lakhs of bike taxi operators as well as those who rely on this mode of transportation daily to be able to move around the city. However, such bans go against the fundamental rights guaranteed under the Constitution and must be removed.
Existing Regulations
The subject of Road transport falls under the Concurrent List thereby allowing both Central and State governments to implement and enforce regulations. The sudden order to outrightly ban bike taxis has come in light of the violation of the Motor Vehicle Act, of 1998 that has been imposed by several states. There is no central legislation regulating bike taxis in India thereby allowing the states to issue permits for bike taxis as per Sections 72 and 73 of the Motor Vehicle Act. This ban has been imposed as per the 2019 Amendment to the Motor Vehicles Act in which a mandatory license is required for vehicles operating for transportation or taxi services. Despite the central government recognising taxi aggregators as per the 2019 Amendment, the order of the Delhi government rests on the fact that the state government can bring up its own aggregator policy. The ban primarily applies to apps such as Ola, Uber, and Rapido that are engaged heavily in transportation services, especially the use of bike taxis. In 2016 Karnataka banned the operation of bike taxis citing several guideline violations and in 2021 introduced the Karnataka Electric Bike Taxi Scheme, 2021 for the sole operation of e-bike taxis in the State. Along similar lines came the ban by the Maharashtra Government in early 2022 for which a committee has been established to develop guidelines in the State. The same has caused protests by unions of taxis and auto. In contrast, several State governments are continuing with bike taxi operations as an essential mode of transportation with set regulations in place. Goa was the first state to permit bikes as commercial vehicles in 1981 followed by Mizoram and West Bengal in 2016. In addition, several other states such as Bihar, Jharkhand, Chandigarh, Rajasthan, Punjab, Haryana and Uttar Pradesh have mandatory operational regulations such as license registration, safety requirements, device tracking system, etc.
Issues With Outrightly Banning Motorcycle Taxis
Article 19(1)(g) of the Constitution provides the right to freedom of practicing any trade or profession subject to reasonable conditions. The Supreme Court in the past has tested the proportionality of reasonable conditions on grounds of (i) the measure having a designated purpose, (ii) the measure is rationally connected to the fulfilment of the purpose, (iii) the non-existence of any alternative measures that are less invasive and (iv) there is a proper relation between the importance of achieving and limiting the right. If this test is applied to the blanket ban imposed on motorbikes, it fails on the third and fourth prongs. Talking about the third prong, given the existence of regulations for four-wheeler motor vehicles to operate as taxis in all these four states, it is a clear indication that regulation of such bike taxis is a less invasive alternative which does not violate the fundamental right guaranteed under Article 19(1)(g). To discuss why the test fails on the fourth prong, it becomes important to discuss why the government wants to ban bike taxis in the first place and understand the importance of bike taxis for the Indian economy.
The main motivation of the state governments to ban bike taxis stems from not just the violation of the Motor Vehicles Act but the lack of guidelines for the regulation of bike taxis. The governments have cited safety concerns as the drivers may drive fast to complete more trips leading to several accidents. Further, the issue of pollution is predominant in this ban which is leading these state governments to work up schemes around the electrification of vehicles. Understandably, these issues would motivate the government to take action. However, a blanket ban on bike taxis is entirely arbitrary as it accounts for the livelihood of over 20 Lakh Indiancitizens. It is available in over 200 cities and towns across India even though app-based bike taxis started 7 years ago in 2018. The market is still expanding exponentially with new people joining as bike taxi drivers daily. Other than providing for livelihood, bike taxis have been providing quicker last-mile connectivity to places at a cheaper price than government-run alternatives such as buses and metros fail to reach. They also improve the ridership of public transport as they make a cheaper alternative to reach the metro and bus stations. The success and the acceptability of this mode of transport can be seen from the fact that between 5 to 7.5 lakh bike taxi rides are taken in Delhi NCR alone.
Hence, it cannot be the stance of the states that the importance of banning bike taxis due to safety concerns is more important than the general public not having access to a more economical and highly accessible mode of transportation. Therefore, the ban fails on the fourth prong as well and it becomes necessary to remove this ban to protect the right of freedom of practice and trade or profession.
Implementing A Uniform Regulation
Even though the governments of Delhi and Karnataka have stated that they are working on a regulatory framework for two-wheelers to operate as taxis by obtaining a commercial license. It is vital that instead of every state has different laws on the regulation of bike taxis, the central government has its own regulation governing commercial bike taxis. The reason is that there would be several differences in the law of each state such as the ones seen in the proposals of Delhi and Karnataka where only EV bikes are allowed to be registered as well as varied environmental and economical differences in regulations as covered by TERI. Further, given that cab aggregators like Ola, Uber and Rapido operate bike taxis across the country, complying with the regulations of each state which would differ in laws and procedures would lead to an increased regulatory cost. The same would impact India’s standing under the Ease of Doing Business Initiative, an aspect in which India has improved considerably in the past few years.
As per Section 96 of the Motor Vehicles Act, of 1988, the State Government has the power to make rules relating to the control of transport vehicles including the issuance of permits and motor cab ranks. However, as per Section 75, the Central Government possesses the power to make a scheme for regulating the business of renting motorcycles through drivers. Therefore, a regulation for bike taxis is well within the right of the government under the existing legislature.
A differentiation can be made between conventional bike taxis and the more prevalent app-based bike taxis. Conventional bike taxis could be those which do not utilize cab aggregators such as Ola, Uber or Rapido to reach out to clients. They can be regulated by the respective state governments as is the current case in Goa where the government has been issuing bike taxi permits since 1981.
In order to increase safety, the central government can make regulations that apply to four-wheeler taxis and also applicable to app-based bike taxis for safety and emission regulations. As suggested by ORF, It can include a mandatory vehicle fitness certificate, the requirement of a commercial driver's license to operate the bike taxi, insurance coverage for both the driver and the passenger, requirement of mandatory safety training by the cab aggregator, mandatory GPS Tracking and helmet for the passenger. Further, a higher penal provision can also be created for traffic violations by bike taxis. Even the guidelines issued by the Karnataka government can be replicated for a nationwide policy which includes a distance limit of 10 km, helmets and reflective jackets for drivers, affixing the details of service providers on the exterior of the bike and the use of a GPS for aggregators operating more than 50 bike taxis. Coming to emissions, even though it is important to phase out non-electric bike taxis, there cannot be a ban on them straight away. A gradual phase-out plan should be created to phase out all bike taxis for 5 or 10 years. The reason is that bike taxi drivers enter this industry due to low capital investment which arises due to a lack of resources on their part. A ban on all non-electric bikes would have the same effects as the current blanket ban.
All these measures would ensure that the concerns of the various state governments with bike taxis are regulated and the livelihoods of the bike taxi drivers as well as the convenience of those who rely on these bikes daily for travelling across their city where public transport is not accessible, are protected.
Views are personal.