Gujarat govt drafts rule to cap number of Ola, Uber cabs to 20,000

Gujarat could soon become the first state in India to implement curbs on cab aggregators. The state is planning to cap the number of ride-hailing cab services like Ola and Uber to maximum 20,000 over safety concerns, a move that could drastically affect their business.

As per a draft issued by state Posts and Transport Department, the cab aggregators will not be allowed to attach more than 20,000 cabs in the state, and that a particular company will be given only one licence to operate.

"We remain committed to engaging the government and working with relevant authorities to enable regulations that can enhance the future of urban mobility in Gujarat's mega cities," The Economic Times quoted an Uber official as saying. The company said Uber was committed to "bringing smart mobility" and finding ridesharing solutions.

Ola, Uber is the frontrunners when it comes to cab service in India. Though there are just around 10,000 such Ola and Uber cars in Gujarat so far, both these companies collectively hold 90 per cent of the market in India. Capping their number means no expansion from a certain point, which could hurt their revenue.

The state government, however, views putting a cap on them as a preventive measure to stop the rising incidents of attacks on passengers in cabs. The department right now is evaluating views from all stakeholders before finalising the policy. The initial draft says the government is empowered to cancel or suspend licence of any company that fails to comply with the rules. The draft rules allow the state licensing authority to cancel the licence for 10 days to six months or cancel them permanently in case of repeated complaints like misbehaviour or violence on the part of driver or licensee.

While Uber runs its cabs across 600 cities of the world and has over 4.5 lakh drivers across India, Ola runs over 9 lakh vehicles in over 110 cities in India. Besides, Ola also operates in seven major cities across Australia, New Zealand and the United Kingdom.

Edited by Manoj Sharma