Ola’s license to operate in the state of Karnataka has now been suspended for 6 months. This is because the cab-hailing service did not comply with an order they had received to suspend illegal two-wheeler taxi services within Bangalore. Regarding the matter of suspension, Ola has said that it plans to work with the concerned officials in order to resolve the issue.
Karnataka’s State Transport Department had sent Ola’s parent, ANI technologies, a letter regarding this suspension. The company has only three days in order to suspend all its services, including four wheeler taxis.
“As ANI Technologies Pvt Ltd, which operates Ola, has violated the Karnataka On-Demand Transportation Technology Aggregators Rules 2016, their aggregator license — which was issued for a period up to June 2021 — remains suspended,” said the letter.
According to Vivek Ikkeri, Transport Commissioner, the matter is extremely serious. If Ola does not comply with the suspension order, then all Ola cabs running in Karnataka will be seized. Moreover, the drivers who work with this platform will also be penalized as a result of this.
Ola issued a statement regarding this new development in its timeline. It said “This notification is unfortunate, and we look forward to an opportunity to address these concerns directly with state officials to find a solution for our driver-partners and millions of Ola users in Karnataka,”
The State Transport department had warned Ola on February 15 about illegal bike taxi services and asked the company to suspend these services. When this did not happen, they also seized many bikes that belonged to Ola, as well as another bike taxi service provider is known as Rapido. But these measures did not seem adequate to the government and they went ahead with suspending Ola’s license to operate.
“Despite other companies continuing to operate illegally, Ola halted its bike taxi experiment weeks ago, instead of seeking the state’s cooperation to develop a legal framework for a pilot,” said the company in a statement. “We are evaluating all options to find an amicable solution wherein hundreds of thousands of driver-partners in the state of Karnataka can continue to work and serve the mobility needs of our citizens.”
This suspension of 6 months comes as a huge blow to the company as Bangalore is one of its biggest markets in India. There are a total of 1,20,000 cabs operating in Bangalore, and 65,000 of these use both, Ola and Uber interchangeably.
Siddhartha Pahwa, the former CEO of Meru Cabs, also commented on this issue. He said, “Revoking Ola’s license is immaterial because executing that order on the ground is very hard.” He also added, “There’s a reasonable demand-supply equation that has been established and governments should let market forces shape the industry now.”