Karnataka’s action on Ola could slow down investor interest in mobility start-ups

Sangeetha Chengappa Bengaluru | Updated on March 26, 2019 Published on March 26, 2019

Olas’s temporary licence suspension by the Karnataka Transport Department last week for running illegal bike-taxi services that was revoked on Monday could slow down the pace of the ecosystem of nearly 200 mobility start-ups, especially with newer forms of micro-mobility solutions.

Investor interest in mobility start-ups in the State could witness a slowdown in the near term, unless the State government comes up with policies to keep pace with newer technologies.

“The inconsistency in State government rules is bound to scare away investors in the near term from placing their bets on mobility start-ups in the State. While it penalised Ola for running bike-taxi services in Bengaluru, it has not questioned Swiggy or Zomato whose delivery partners are using white board two-wheelers that are not meant for commercial use, when they should be using yellow board vehicles that are meant for commercial use,” observed an investor in a mobility start-up, who did not wish to be identified.

Both Uber and Ola, which have been running bike-taxi services UberMoto and Ola Bike in multiple cities across the country, have submitted proposals for approval of bike-taxi services to the State Transport Authority (STA) in Karnataka. However, they are yet to receive a positive response from the government.

Asked if the STA is considering legalising bike-taxis in the near future, like in other cities pan India, Transport Commissioner VP Ikkeri, said, “A committee has been set up for it and is looking into all opinions and issues of stakeholders including state-run road transport corporations, police, auto-drivers, cab drivers, life/accident insurance providers and other agencies. All this takes time.”

Dhivik A, Founder and CEO of Go GreenBOV, maker of electric two-wheelers, said, “While the State government was right in penalising Ola for flouting the law, newer forms of mobility solutions that will address the need for clean, affordable and quick last mile connectivity for harried commuters will definitely take a hit as bike-taxis are not regulated in Bengaluru.”

Currently, Karnataka is home to 196 mobility start-ups that offer services and products ranging from app based ride-hailing cab services, online scooter rentals, app-based driver on-demand services, electric and hybrid two-wheelers, electric bikes, on-demand last mile metro connectivity provider, electric cars, platform to rent cars, and so on.

With over a 55 lakh two-wheelers, over 15 lakh cars and the total vehicular population touching 80 lakh in Bengaluru, combined with the inadequate public transport system, there is a dire need for the State to provide cheaper, quicker mobility solutions to the masses, who cannot afford to own vehicles.

“Bengaluru is the hi-tech capital of the country, therefore Karnataka should take the lead in pointing the way for providing cheaper, quicker rides from point A to point B to suit the changing needs of commuters. If cities like Gurgaon, Agra, Jaipur, Goa etc can offer bike-taxi services, why can’t the State authorities work together with mobility start-ups to legalise bike-taxis in Karnataka? asks Ramprasad Shastry, CEO of DriveU, an on-demand private driver service start-up.

Yulu, a smart bicycle sharing service that offers a dockless, smart bicycle sharing service in Bengaluru, Pune, Navi Mumbai and Bhubaneshwar, worked with city officials to come up with a legal framework before starting services. “We have been given a permit by the Directorate of Urban Land Transport (DULT), Government of Karnataka to offer Yulu in Bengaluru. We do not start services in any city before we receive a permit from the city officials” said Amit Gupta, co-founder and CEO, Yulu.

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Published on March 26, 2019
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