Uber scores small regulatory victory in India

India's government shares new rules opening the doors to Uber and competitors

Technology trends and news by Ronny Kerr
October 13, 2015
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You win some, you lose some.

A day after Uber faced troubling news out of China, India’s government has prepared regulatory guidelines that would open the doors to Uber and other car-hailing services. The government has gone so far as to tell state administrations to issue licenses to these providers, according to Bloomberg.

In the new guidelines issued by the Ministry of Transport, ride-hailing providers must apply for permits from state transportation departments, but they will not be regulated as traditional taxi companies. Additionally, they will not be permitted to own or lease vehicles or represent themselves as a taxi service unless they also register as taxi operators.

That said, they will need to maintain call centers and follow emission standards, which are already standard procedures for taxi companies. And states could set maximum fares for the services, another way to make them somewhat equal to taxis.

Also, the new guidelines require background checks for drivers, clearly a response to questions over the safety of Uber and ride-hailing apps in general. In Dehli, Uber was banned until recently after one of their drivers was accused of raping a woman passenger in December. It was later discovered that the driver had a previous criminal record.

Under India's new guidelines, any person with a criminal record would not be allowed to become a driver. Other new safety guidelines require ride-hailing vehicles to have location tracking and an emergency safety button.

It’s clear that the new guidelines are a small victory for Uber, which currently operates in 22 cities across India, as well as its competitors in the region, including Bangalore-based Ola Cabs, or Ola. An Uber spokesperson told us they considered the guidelines a "big leap" for ride-hailing services in India.

Serving Bangalore, a center for India's high-tech industry, one of Uber's regional Twitter accounts declared the news "a step in the right direction for urban mobility in India.”

It’s not all good news across the globe, however, as Uber pursues aggressive expansion in multiple regions. Just yesterday, we reported that the Chinese government's Ministry of Transport is considering rules that could hinder Uber's growth while benefitting its locally-based rivals, like Didi Kuaidi.

As with China, India is a massive market for Uber, which is eager to be the primary ride-hailing service for the country’s 1.2 billion population. Last year the company launched uberGO in several Indian cities, including Bangalore, Mumbai, and New Delhi. And just this week uberPOOL came to Bangalore.

But in the end, it’s the regulatory atmosphere that will determine the extent to which ride-hailing companies can either flourish or flounder in different markets around the world.

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