Karnataka Authorities Deny Rapido’s Request for Bike Taxi Contract Carriage Permits

Rapido stands as an Indian ride-hailing platform, focusing mainly on gathering bike taxis. Alongside this, it extends its services to auto rickshaws, taxicabs, parcel delivery, and third-party logistics. Established back in 2015, the company calls Bangalore its home base and extends its reach to more than 100 cities. However, it faces hurdles in areas where bike taxis aren’t legally permitted, encountering some legal tangles along the way. Back in September 2018, there were reports swirling around about Rapido boasting over 15,000 registered riders, clocking in an average of 30,000 rides daily. Following this buzz, the likes of Hero MotoCorp chairman Pawan Munjal and former Google India head Rajan Anandan decided to invest in the company. Fast forward to 2019, Rapido’s co-founder Aravind Sanka proudly declared that the company had generated over 500,000 job opportunities across India. By November 2019, the company proudly announced hitting the milestone of 1 crore registered users.

Related: Rapido Triples Revenue to Rs 443 Crore in FY23, Diversifies Income Streams

The Karnataka government has firmly turned down Rapido’s request for contract carriage permits for bike taxis. Following the rollback of the 2021 electric bike taxi policy by the Karnataka government, Rapido appealed to authorities on Tuesday (March 12) to grant contract carriage permits for bike taxis. However, state transport minister Ramalinga Reddy, as reported by The Economic Times, stated that there are currently no intentions to issue such permits for two-wheelers. Simply put, a contract carriage refers to a motor vehicle hired under a contract to carry passengers for payment or reward.

Advocating for the issuance of contract carriage permits for motorcycles, a startup based in Bengaluru emphasized the importance of local authorities adopting a comprehensive strategy, mirroring the guidelines outlined in both the Motor Vehicle Act and a recent advisory from the Ministry of Road Transport and Highways (MoRTH) regarding the granting of such permits.

The MoRTH issued this advisory earlier this year in January, explicitly stating that motorcycles are included in the definition of contract carriages.

Expressing the significance of this approach, Pavan Guntupalli, co-founder of Rapido, remarked to ET, “This initiative is not just pivotal for the advancement of the industry but also guarantees adherence to the existing regulations of the Motor Vehicle Act, 1988, and Motor Vehicle Rules.

In a commendable move, Rapido has expressed its appreciation for the decision made by the Congress-led state government to revoke the bike taxi policy of 2021. Emphasizing the government’s dedication to nurturing an environment conducive to innovation and expansion within the ride-hailing sector, the company hailed the decision in a recent statement.

Nevertheless, the ride-hailing startup has also conveyed its concern regarding the confusion stemming from the policy’s withdrawal, particularly the misconception that bike taxis would be banned—an issue not addressed in the recent order.

Rapido clarified, stating, “It is important to note that the recent government notification makes no mention of banning Rapido or any other aggregator, as protected under the High Court order.”

The term “protection of HC order” pertains to a ruling from the Karnataka High Court in August 2021, instructing transport authorities to refrain from taking any “coercive action” against Rapido’s bike taxi service. Notably, there’s a scheduled hearing on March 20 regarding the extension of this interim order.

In the meantime, Guntupalli asserted that Rapido’s bike taxi service will remain effortlessly accessible throughout the state.

“Rapido is steadfastly abiding by the interim order of the Hon’ble High Court, which validates the legality of our operations, affirming our commitment to continue serving the people of Karnataka,” the cofounder emphasized.

Just days after state authorities pulled back the 2021 bike taxi policy due to its misuse, recent comments have surfaced. Transport minister Reddy attributed this decision to a lackluster response from app-based aggregators and concerns for women’s safety.

Ride-hailing companies have found themselves targeted by both auto unions and the state government lately. Last year, auto drivers took aggressive actions during a protest, blocking bike taxis and even assaulting riders.

Meanwhile, bike taxis had faced a near-ban due to safety concerns for women. However, the 2021 scheme ultimately helped resolve tensions between bike taxi operators and the government.

The Karnataka government has rejected Rapido’s request for contract carriage permits for bike taxis, following the rollback of the 2021 electric bike taxi policy. Despite the advocate for issuing such permits, the state’s Transport Minister confirmed that there are no plans to grant them for two-wheelers. Rapido expressed appreciation for the government’s decision while highlighting concerns about the policy’s withdrawal, particularly regarding misconceptions about potential bans. A ruling from the Karnataka High Court prevents coercive action against Rapido’s bike taxi service, with a pending hearing to extend this interim order. Tensions between ride-hailing companies, auto unions, and the state government persist over safety concerns and regulatory changes.