 "The interior of the office of ride-hailing service Uber is seen in this picture in Gurugram")
Taxi-hailing app Uber on Friday claimed in the Karnataka High Court that it is a technology platform that connects drivers with consumers and, hence, cannot be regulated under India’s Motor Vehicles Act, which governs taxis and aggregators in the country.
Uber’s Counsel Sajan Poovayya told the court that the company was not challenging the validity of the Act, but that it was being wrongly categorised as an agent under Section 93 of the Motor Vehicles Act.
“I don’t own these vehicles, nor do I own the passengers. I am only a platform,” said Poovayya, arguing that Uber was not soliciting rides, nor selling tickets, which was the criteria to be an agent under the Act.
In April 2015, India’s road transport and highways ministry in its advisory to state governments had maintained that taxi-hailing services or the on-demand transport aggregating services were covered under Section 93 of the Act.
It also sanctioned power to the state governments to regulate such service providers.
The Karnataka government, which in April introduced rules to regulate taxi aggregators such as Uber and Ola, mandated that to get a licence each company should have a minimum of 100 cabs meeting the specifications.
These cabs should be equipped with digital meters, panic buttons and global positioning system modules and comply with capping taxi fares at rates that would be periodically reviewed by the state.
Uber has said that its application for a licence under the Karnataka On-demand Transportation Technology Aggregator Rules, 2016, is yet to be approved, despite making multiple attempts. Meanwhile, rival Ola has secured the licence.
Ola, playing the nationalist card has called Uber a foreign company interested only in making profits.
Both Ola and Uber are backed by venture capital funding and are vying with each other to dominate the taxi market in India. They are offering incentives to drivers and discounts to customers to hire cabs on their platform. At the same time, they earn a 25 per cent commission on each ride.
Uber and Ola work on the business concept of the network effect, where the platform of the largest number of either drivers or consumers control a disproportionate share of the market.
The battle on the streets has now spilled onto the courts. Ola and the Radio Taxi Association, whose members include Meru, are supporting the Karnataka government rules.
Uber’s counsel on Friday defended the so-called surge pricing by the taxi-hailing app, saying industries such as hospitality and airlines always increase pricing when there is demand.
“Surge does not increase the capacity in airlines. In our case, we are increasing the capacity of cabs on roads,” said Poovayya. He said limiting drivers to drive for only eight hours on a platform could not be implemented because the rules allow them to shift between multiple aggregators and there is no mechanism to monitor that.
The Karnataka High Court will resume hearing on July 11.
