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The Government of Karnataka has banned Ola cabs from operating in the state. This development has come about after the Transport Department of the state has alleged that the cab aggregator had been flouting guidelines.
Ola has been banned from operating in the state for six months as its license has been suspended for the duration. Ola is one of the largest brands in the country and has millions of customers and thousands of drivers under its banner.
The ban on Ola will definitely affect not just the top-level management of Ola, but all of the aforementioned people relying on the company. The cancellation of the license and state-wide six-month ban is a result of Ola operating two-wheeler taxis even when they did not have a license to do so.
Two-wheeler taxis are banned in the state of Karnataka and it doesn't look like the Transport Department of the state will allow two-wheeler taxis to play anytime soon. Ola's arch-rival Uber too has faced this issue in the past when it has to withdraw its two-wheeler taxi service from Karnataka back in 2016 when the government started seizing its vehicles.
Now, Ola is facing the department's wrath, but this time, the punishment is severe. The six-month ban has been implemented with immediate effect and this will affect the commute of lakhs of people and the livelihood and income of thousands of drivers registered with Ola.
In Karnataka, Bangalore is the biggest market for Ola. The cab aggregator operates in three other cities — Mysore, Mangalore and Hubli. An image of the notification served to Ola by the Transport department has surfaced online.
The order states that, "We have received information that Ola has started motorbike service. Upon acting on information, we conducted a preliminary inquiry and found out that Ola is indulged [indulging] in unlawful activity. First, a notice has been served to Ani Technologies Pvt Ltd (Ola), which has been asked to explain within a week
The explanation was not sufficient, hence the department is initiating the action and cancelling the permit. For the next six month, Ola Cabs is banned from plying on Karnataka's roads and the original permission papers should be handed over to the transport department within three days of this order."
Ola on the other hand called it an unfortunate incident. An Ola spokesperson was quoted as saying, "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." Ola has over 10,000 taxis under its banner and it is at the moment unknown as to what the taxi drivers would do.
Thoughts On Ola Cabs Banned In Karnataka After Transport Department Suspends License
There are other companies like Rapido continuing to operate in the two-wheeler taxi space, and the irony is that these companies rely only on bike taxis for their survival. For Ola though, bike taxis formed only a minute part of its operations.
Ola has autorickshaws, and taxis of all size in all segments and because of this ban, all taxi operators would be affected. The drivers may attempt to move under the Uber banner if the ban is continued and a solution doesn't come up between the government and Ola.