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Karnataka High Court stays a service ban on Rapido, Uber, and Ola

Karnataka High Court passed an order for the state officials to avoid taking any coercive steps against the operators. They must obey this order until the submission of a report regarding additional service charges. The reports should be submitted within ten to fifteen days.

Karnataka High Court allowed these cab operators to charge ten percent as a convenience fee over the base fare. It also set a temporary rule for them to charge a 5 percent GST until the authority submits a plan.

Previously, the auto aggregators used to charge Rs. 40 as a convenience fee for every ride.

Auto operators, including Rapido, Uber, and Ola, have received a big relief from the Karnataka High Court. The State Transport Department had earlier imposed a ban on them for charging extra money from people. The Karnataka judiciary has put an interim stay on the order of the Transport Department. Court has passed an order for the state government to set fares according to the law.

Moreover, the HC asked state officials to avoid taking any coercive steps against these auto operators. This order will remain until it submits a report regarding extra service charges within 10 to 15 days. Court has postponed the hearing of this case to November 7, 2022.

Uber released a statement saying that the company welcomes the order of the court. It stated that the order gives recognition to the right of auto drivers to work on the aggregator platforms. Uber imposes booking charges which let it cover its costs and provide uninterrupted service.

Furthermore, the Karnataka HC also allowed these operators to impose a 10 percent convenience fee over the base fare. They can also charge 5 percent GST till any plan comes up from the authorities. Earlier, they used to charge Rs. 40 as a convenience fee per ride. The spokesperson of Uber said that the commission limits threaten the growth of this e-hailing sector. As a result, it will impact thousands of cab drivers as their livelihoods depend on it. It will further shrink this fledgling field.

However, Rapido, the logistics service provider, and a bike taxi operator did not opt for filing a petition. On the other hand, the legal representatives of Uber and Ola argued that the Transport Department’s notice violated the rights of the cab drivers. It is against the On-Demand Transportation Technology Aggregator Rules of Karnataka 2016.

Meanwhile, the decision contradicts the instructions of the HC’s division bench passed in December 2016. It asked the government authorities not to take any action against these operators. But, the appeals have still not got the adjudication on the rules’ validity.

The advocates of auto aggregators mentioned that at least twenty percent of the extra fee is necessary for the operation. It is also important to provide proper remuneration to the cab drivers. But, the court continued with its past order of charging ten percent fees over the base fares until the authorities found a better solution.

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