New Mobility at #CK2017 | Rishabh Sinha, TRA Law

1. A product of WRI Ross Center for Sustainable Cities
WORKSHOP: REGULATORY
CHALLENGES IN URBAN
MOBILITY
The road ahead

2. SESSION OVERVIEW
• The Ground Reality of Urban Mobility
– Current problems
– Possible policy solutions
• The Regulatory Framework of Urban Mobility
– Motor Vehicles Act as it is applies
– Issues being faced due to the existing law
– Proposed (relevant) amendments to the Act
– Examples of different State regulations that apply
• Brief Case Study Discussions on Common Challenges

3. GROUND REALITY

5. REGULATORY
FRAMEWORK

6. MOTOR VEHICLES ACT 1988
• Individual taxis require a “contract carriage permit” (under section 73).
• Buses (in section 2(29) as “omnibus”) and other public transport require a ”stage carriage
permit” (under section 70) for ride sharing purposes.
• States will be responsible for publishing the relevant operational guidelines and the actual
issuing of such permits.
• Aggregators, while not explicitly defined or recognized by the MV Act, are usually granted
licenses by States as “agents or canvassers permit” (under section 93). [Keeps out the
obligations under IT Act 2000, unless explicitly specified]
• Cab sharing is not possible under the present Act as
– a contract carriage permit explicitly disallows (under section 2(7) allows for journey from one point
to another only and no other passengers can be picked up/dropped off on the way)
– a stage carriage permit cannot be granted to cabs [under section 2(40) whose requirement is a
vehicle which can carry more than 6 passengers (excluding the driver), and therefore expressly
outside the meaning of ”motorcab” in section 2(25) which can only have a maximum of 6
passengers].

7. • All vehicles that seek to transport people for commercial purposes
(i.e. charging fares) require the relevant permit under the MV Act.
• Since private vehicles are for personal use, they are treated
differently. If they wish to undertake ride sharing for a profit incentive
(as mooted by most ride-share platforms), they will require a
contract carriage permit (as they cease to be classified as private
vehicles, but as commercial vehicles).
• Bike taxis (private sharing or individual taxis) will be unable to obtain
a carriage contact permit as they do not come within the meaning or
the allowed categories of vehicles (only three wheelers of certain
CC and higher class of vehicles).

8. THE MOTOR VEHICLES (AMENDMENT) BILL, 2016
• Defines "aggregator" (in section 2(1A)) as a digital
intermediary or market place for a passenger to
connect with a driver for the purpose of transportation.
• Adds ”aggregators” to section 93 (along with agents
and canvassers).
• Issue of license to aggregators will be done by State
Govts. following the guidelines laid down by the
Central Govt.
• Further imposes obligation on aggregators to comply
with the IT Act 2000 and the rules made thereunder.

9. DELHI
• Introduced “City Taxi Scheme 2015” which merged Radio Taxi
Scheme 2006 and Economy Radio Taxi Scheme 2010 within itself.
• License granted under Section 93 of MV Act (agent or canvasser) to
“aggregators of taxis”.
• Minimum fleet of 200 taxis either owned or through an agreement
with individual taxi permits.
• Individual taxis need a valid contract carriage permit by state
authority under section 74 of the MV Act.
• The licensee shall charge fare as prescribed by the transport
department.
• The licensee shall be responsible for quality of drivers, their police
verification and their conduct with passengers.

10. MAHARASHTRA
• Introduced ”Maharashtra City Taxi Rules 2016” during late 2016.
• At least half of a ride-hailing company’s fleet should have engine
capacity in excess of 1,400cc and should ply on “clean fuel” such as
unleaded petrol or compressed natural gas.
• Mandates a dress code for drivers and a colour code for cars
registered under the rules, among other things.
• Regulates fares charged by the services in an attempt to curb surge
pricing.
• The price of permits, to be paid for by drivers—Rs25,000 for cars
with less than 1,400cc engines and Rs261,000 for those with more
than 1,400 cc engines—and a deposit of Rs50 lakh for 1,000 cars to
be paid by ride-hailing services.

11. KARNATAKA
• Introduced “Karnataka On-demand Transportation Technology Aggregators
Rules 2016” in early 2016.
• Fleet size of minimum of either 100 taxis owned or in agreement with
individual taxi permit holders.
• Driver should be a resident of Karnataka for a minimum of 5 years and
should have a working knowledge of Kannada and any other language,
preferably English.
• The fare cannot be higher than the one fixed by Government from time to
time and the fare policy must be published beforehand.
• Rides will be from passengers’ pick up and till the point of destination (can
only charge for that journey, no dead mileage).
• Permit holders have the liberty to operate with any other aggregator
simultaneously as per their discretion.

12. WEST BENGAL
• Classified as “'on-demand transport technology aggregators’
(i.e. as technology company) and therefore within the ambit of
the Information Technology Act 2000.
• Under this definition, they fall within the meaning of
“canvanssers” (under section 93 of the MV Act).
• The cab aggregators cannot own or lease vehicles and
neither can they employ drivers.
• They will be considered transport companies (and hence,
require the corresponding license) only if it “applies its own
brands to the means of transport” it seeks to make available
on its platform.

13. CASE STUDIES

14. GENERAL CONTEXT
• A high-valued start-up company is running services as a cab
aggregator in the country for the past several years, facing tough
domestic competition from both Indian and multinational
counterparts.
• Since internet penetration in India and public trust in e-commerce
has been low, the company has had to spend millions of dollars to
tackle public scepticism and create a market for itself by bringing on-
board drivers as well as consumers, through massive spending on
marketing and discounts.
• Many of the urban-mobility solutions mooted by the Company,
supported by the Company’s superior IT platform, have been
recognised as innovative and game-changing. However, it has faced
various social and regulatory hurdles in enforcing these solutions.

15. CASE STUDY 1: TWO WHEELER TAXIS
• The Company found that urban mobility in India is riddled with
multiple problems, chiefly, (i) high traffic density, leading to long
commute times; and (ii) a lack of reliable and cost-effective point-to-
point modes of transportation.
• Accordingly, the company launched two-wheeler taxis across
several cities in India as a panacea to the aforementioned
challenges.
• After an initial run of about 3 months, some states abruptly ban the
initiative after ruling that a commercial vehicle license cannot be
awarded to two wheelers. However, operating within a similar
statutory framework, other states have openly allowed their
functioning.

16. QUESTIONS FOR DISCUSSION
• What are the public risks in allowing two-
wheelers a commercial vehicle license?
• Can the aforementioned public/regulatory
risks be addressed by proper regulation?

17. CASE STUDY 2: RIDE SHARE AND CAB POOLING
• In the backdrop of heavy traffic congestions in most urban centres of India along with
worsening air quality levels (a large part of which is purported to be contributed by
vehicular emissions), globally, sharing of vehicles is being encouraged as a method to
reduce the number of vehicles on the road. In fact the Government of NCT has even
piloted initiates that indirectly mandated ride-sharing.
• Sensing an opportunity, the company introduced 2 new features: (i) allowing private ride-
sharing by letting users share their personal vehicles with customers on the platform; and
(ii) matching their cab customers moving in a similar direction to pool their ride and share
costs.
• In some states like Karnataka and Delhi the extant law explicitly disallows cabs to stop
midway and on-board new riders, which permission is provided currently under a stage
carriage permit (used by Bus operators). In case of private individuals sharing their
personal vehicles on the Company’s platform, any use for a commercial gain will be illegal
unless done under a commercial vehicle permit. Consequently, these new features have
caused much friction with the regulators, risking severe penalties on the company, and in
some cases the users as well.

18. QUESTIONS FOR DISCUSSION
• What are the public risks in allowing ride
sharing for taxi operators?
• What are the public risks in allowing
private individuals to car-pool with a
commercial incentive?
• Can the aforementioned public/regulatory
risks be addressed by proper regulation?

19. CONCLUSION:
THE MILLION DOLLAR QUESTION(S)
Public Innovation vs. Private Interest
• What can be the government’s role in
encouraging innovation?
• Should the government regulate innovation?
• What are the low-hanging fruits in urban
mobility innovation that the government can
address quickly?

20. THANK YOU
Rishabh Sinha, Counsel
rishabh@tralaw.in
Jitender Tanikella, Partner
jitender@tralaw.in
B-99, Gulmohar Park, New Delhi
www.tralaw.in