Ola and Uber to start cab services in J&K. Govt notifies rules.

16 July 2023

Srinagar, July 16: Finally, Ola and Uber companies are all set to start their cab services in Jammu & Kashmir. According to an official notification, both the companies have been granted licenses by the Jammu & Kashmir government to operate in the region.

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J&K administration has also notified the J&K Motor Vehicles Aggregator Rules, 2023 in the official gazette last week, which define the rules and regulations for securing licenses by aggregator companies, registration and fare system for the drivers.

Ziraat Times brings to its readers key snippets from the J&K Motor Vehicles Aggregator Rules, 2023:

What would Ola and Uber services mean for J&K?

Ola and Uber often offer lower fares than traditional taxis, which can bring big relief to common people across J&K, many of whom find it unaffordable to hire a taxi. Hiring a cab is likely to get less time consuming as well. Riders will also have a variety of payment methods available, including cash, credit cards, and debit cards. Importantly, Ola and Uber could create new job opportunities for unemployed youth who would wish to register as a driver.

As what has been observed in other cities in the country, demand and prices for second hand cars are also likely to go up.

Impact on traditional taxi system in J&K:

The news of Ola and Uber arrival in J&K is likely to upset traditional taxi systems – both their owners and drivers . Most of the existing taxi owners in J&K have bought their cabs through bank finance on high interest. They are likely to face stiff competition from the Ola-Uber system, and their finances may face a strain. However, in case they choose to register with the Ola-Uber system, they can survive, but their earnings are likely to take a dip.

How to register as a driver with aggregator companies like Uber, Ola?

J&K Motor Vehicles Aggregator Rules, 2023 also specify the requirements for drivers to register with a cab aggregator. The drivers must have a valid driving license, at least 2-year driving experience and a police verification certificate. The vehicles must be in good condition and must meet all applicable safety standards. The aggregators would charge drivers a small fee to register with them and to use their app.

As per the rules, 80% of the fare income would be taken by the cab driver, while 20% would go to companies like Ola, Uber etc.

(For more detailed criteria and requirements, please refer to the J&K Motor Vehicles Aggregator Rules, 2023)

What after registration as a driver?

Once an interested driver applies to become a driver with a company, the aggregator would verify the driver’s details. Once the driver’s details have been verified, the aggregator adds them to their fleet of drivers.

Next, the driver is assigned rides. When a rider requests a ride through the aggregator’s app, the aggregator sends the request to the nearest available driver. If the rider pays the fare to the driver in cash, 20% of that will have to be paid to the company. If the payment is made online, the company would transfer the 80% of the fare amount to the driver while retaining its commission of around 20%.

Licensing requirements for cab aggregator companies:

J&K Motor Vehicles Aggregator Rules, 2023, stipulate the following rules for registering as a cab aggregator:

The applicant must be a company registered under the Companies Act, 2013 or a firm registered under the Partnership Act, 1932.
The applicant must have been in operation for at least three years.
The applicant must have a valid GST and PAN number.
The applicant must have at least 250 taxis/autos registered with it.
The applicant must have a developed MIS system, web portals, and mobile app for operation.
The applicant must have a 24*7 call center and a registered office in the area of operation.
The applicant must comply with all applicable laws and regulations.
The application for registration must be made to the Transport Commissioner, Jammu and Kashmir.

The license granted under these rules shall be valid for a period of five years and is subject to renewal after showing satisfactory performance. The licensing authority may suspend or cancel the license if the licensee fails to comply with any of the terms and conditions of the license or if any complaint against the licensee is proved to be genuine.