Court upholds Karnataka rules for cab aggregators, with exceptions

In a setback to taxi technology aggregator Uber, the Karnataka High Court on Thursday upheld the constitutional validity of the Karnataka On-demand Transportation Technology Aggregators Rules (KOTTA), 2016, but struck down seven rules, including compulsion on aggregators to disclose details of passengers to the authorities, and requirement of having a minimum of 100 taxis to start an aggregator service.

Justice Raghvendra S Chauhan delivered the verdict on the petitions, filed by Uber India Technologies Pvt Ltd and some of the cab drivers while rejecting their contentions that the entire Rules were unconstitutional and that the State government had no power to frame the rules to regulate taxi technology aggregators under the Motor Vehicles Act. Another taxi aggregator, Ola, had supported the State’s rules.

The Court also declared that vehicles having all-India tourist permits cannot be used to ply commuters through taxi aggregators but can carry only tourists.

The taxi technology aggregators, and cab owners and drivers attached to services of the aggregators have a month to comply with the provisions of the Karnataka On-demand Transportation Technology Rules, 2016 as the Karnataka High Court on Thursday asked the State not to take any coercive action against them immediately for not adhering to the rules as its immediate implementation may create some inconvenience both for the cab operators as well as the general public.

The Court has asked Uber India Technologies Pvt Ltd and other aggregators to comply with the conditions within a month and asked the State government to publicise the court’s order that the vehicles having all India tourist permits can be used only to carry tourists and not to ply commuters through aggregators services.

Justice Raghvendra S Chauhan was of the view that a reasonable period of one month is essential for compliance of the Rules as the court has struck down some of the rules.

Though the Court upheld the rules making panic button mandatory and prescribing qualification for the drivers, it struck down the rule that mandated the aggregators to disclose particulars of passengers to the authorities for inspection.

“Rule 10(c) and 10(v) of the Aggregators Rules bestow an unbridled, uncontrolled power upon the State to have access to the personal information about the passenger. Such unfettered power is likely to be abused by the State. Thus Rule 10(c0 and 10(v) violate the right of privacy...,” the Court said.

The Court also held as unconstitutional the rule that empowered the authorities to suspend or cancel license if a criminal case is registered against any a driver attached to it.

Meanwhile, the court did not examine the issue of fares to be charged by the aggregators as Uber has accepted before the court that it would not charge more fares than the maximum fare fixed by the State government.