Sunny Days Ahead

THE NEW GUIDELINES FOR TAXI SERVICES ARE SENSIBLE, RATIONAL, AND MORE THAN WELCOME.

- Ananth Krishna

WHILE INDIA’S CITIES are supposed to be the harbin-gers of economic development, our urban transport system is far from perfect. Uber and Ola, the major online taxi aggregator platforms, operate under ambiguous legality, while the drivers attached to these aggregators are harassed (and in some cases even physically assaulted), and some states have even passed illiberal and irrational (yet populist) taxi regulations. The root of the problem can be traced to the statute regulating the use of motor vehicles in India.

The transport regulatory regime in India is a product of the bygone licence raj era. The Motor Vehicles Act of 1988 (MV Act) and the Central Motor Vehicle Rules of 1989 (CMVR) envision a regulatory regime that lays emphasis on licence-issuing by the Regional Transport Authorities and State Transport Authorities.

Since the MV Act is more or less an enabling legislation that allows each state to have its own set of rules and regulations, private players resort to loopholes. This has led to absurd situations, such as when buses registered in Arunachal Pradesh and Nagaland are seen plying in Hyderabad. This is a directl result of the MV Act and its outdated provisions.

While regulations that stifle growth are a feature in almost all sectors in the Indian economy, where the MV Act particularly falls short is with regards to the regulation of online aggregators. The regulation of taxis is under the purview of the central government, but state transport authorities are also allowed to enact rules, as states like Karnataka and Maharashtra have. Both have enacted regressive taxi regulation schemes which stifle market competition and over-regulate these sectors.

There is, however, some good news.