Karnataka suspends Ola’s permit for 6 months

The license of Ola Cabs in Karnataka has been suspended for a period of six months. The state transport department suspended app-based Cabs aggregator license after the company was found violating the license conditions.

The cab aggregator who was running bike taxis, is a violation of license conditions and the government rules.

The license given to M/s Ani Technologies Pvt Ltd Ola Cabs, Bangalore for six months. This means Ola Cabs will not be plying on roads across the state of Karnataka.

The government circular issued on the 18th of March, suspended the licence with immediate effect for six months that was issued by Karnataka state transport department. The government had issued multiple notices to the company, however the company failed to respond as per the department.

Earlier this year, Transport Department officials had seized several bikes which were operating as bike taxis for Ola. The officials probed the case and submitted a report to the Transport Commissioner. According to Section 11 (1) the Karnataka On Demand Transportation Technology Aggregators Rules 2016, the Transport Department can decide to cancel the license of the cab aggregator as there is a violation of rules,” a  piece of the notice read.

The notice added, “Prior to this, a notice must be sent to the company in question. Hence, on February 15, 2019, the Transport Department had sent Ola a notice, asking the company to respond to the findings of the probe. Ola sent its reply on March 3, 2019. As the company’s reply was not satisfactory and did not provide any evidence which proved it did not violate norms, the Transport Department, as on March 18, 2019, has decided to suspend the license of Ola for a period of six months. Ola will have to submit the original copy of the license within three days of receiving a copy of this order.

In response Ola released a statement —

“Ola is a law-abiding company that has always worked with the Government to develop livelihoods, improve mobility, and enable a new technology industry. 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.

We have been closely working with the authorities on this topic, responding to queries and making proactive representations to the ministry. Despite other companies continuing to operate illegally, Ola halted our bike taxi experiment weeks ago, instead seeking the state’s cooperation to develop a legal framework for a pilot that will continue to take advantage of emerging opportunities in the mobility economy.

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 homegrown company of Bangalore, who partners with over 1,00,000 drivers via cabs and auto would lose its major market to its competitor Uber. This would of course impact revenue generation, and also its future expansion plans.