Uber is an American company that sees itself “seamlessly connecting riders to drivers through (their) apps”. Users of its mobile phone application can avail of rides on cars owned by independent taxi operators. By claiming that it is a technology company, and not a taxi service, Uber slips between (often outdated) regulations applicable to traditional taxi services, and yet manages to noticeably compete and capture their share of the market. A recent allegation of rape against an Uber taxi driver by a customer in Delhi fits into a pattern that has been observed in nearly every jurisdiction that Uber operates in – an absence of accountability for the actions of their drivers. In fact, just days after the Delhi incident, an Uber driver in Boston was accused of raping a customer.
Some jurisdictions like Canada and England have debated whether regulations applicable to traditional taxi services should apply to services like Uber. Delhi, according to Satish Mathur, Special Commissioner of the Delhi Transport Department (in discussion with the Economic Times), has taken that route. Cabs taking customers from one point to another in the national capital are bound by the Radio Taxi Scheme, 2006 (“Radio Taxi Scheme”).
After the recent rape allegation, the Delhi Transport Department also modified the Radio Taxi Scheme to allow aggregators such as Uber to be eligible for a radio taxi license. The new rules require aggregators to follow the Motor Vehicles Act, 1988 and the Information Technology Act, 2000. Applications for the license need to be registered under the Companies Act, 2013. Previously, companies such as Uber used cabs which ran plainly on permits and license issued to the owners of the cabs. Satish Mathur had explained that the licenses, for which Uber had never applied, require radio taxi licensees to be responsible for the quality of drivers, their police verification, and the supervision of the behaviour of drivers. Now, the procedure of applying for licenses will change the fundamental nature of the operation of such companies, if they will be able to function at all.
Delhi’s new Radio Taxi Scheme
The Radio Taxi Scheme, which is effective immediately, covers application-based services like Uber. The licensees have to have a registered office in Delhi and the details of the headquarters including a telephone number and an email ID need to be submitted to the transport department. The scheme also requires a panic button that will immediately and directly connect to the nearest police station or police control room and a GPS or GPRS which must maintain constant communication with the central control unit of the radio taxi service during the entire time it is on hire. It is unclear how applications such as Uber will adapt to meet these requirements.
The pending road safety law
Similarly, the pending Road Transport and Safety Bill, 2014 (“Bill”) attempts to bring “aggregators”, such as Uber, within its ambit. The Bill proposes to introduce new statutory bodies to regulate motor vehicles and the introduction of a ‘unified vehicle registration system’ and a ‘unified driver licensing system’ to ensure that each vehicle qualifies safety tests and follows the regulations such as using a biometric system to strengthen accountability. There is also a ‘graded point system’ to grade the conduct of each driver and each time a driver commits an offense such as not using the seat belt or driving under the influence of alcohol, the driver’s license would be suspended after certain points.
Regulation specifically for Uber-style companies
While some jurisdictions are extending the regulations applicable to traditional taxi services to cover aggregator services also, other jurisdictions (like Germany) have opted for an outright ban. Some jurisdictions on the other hand, have reacted with regulations that apply specifically to companies like Uber.
Singapore has set up specific regulations governing ride-sharing companies like Uber. Uber needs to register with Singapore’s Land Transport Authority. Only licensed vehicles and drivers may be used and the fees are regulated too. In Uber’s home state of California, the Public Utilities Commission created a new category, that of “Transportation Network Companies”, in September 2013. Companies under this category, must obtain a license to operate, and all the drivers must have criminal background checks, vehicle inspections, install driver training programs, and hold a commercial liability insurance policy that is in force while the driver is on the way to pick up a customer or is giving a ride to a commuter. In Illinois, the Ridesharing Arrangements and Consumer Protection Act and subsequent amendment require commercial liability insurance, criminal background checks for drivers, and vehicle safety inspections. Drivers working over eighteen hours a week also need to hold a chauffeur’s license. In this way, any drivers who operate through services such as Uber, and drive for over a certain number of hours, are automatically subject to the same criminal background checks and drug testing as regular taxi drivers. Many jurisdictions therefore, have begun legislating, learning to accommodate and yet regulate non-traditional companies like Uber.
While the recent changes in the Radio Taxi Scheme and the pending Bill include “aggregators” like Uber, it remains doubtful whether such technology-based companies will actually be able to function in their current avatar. Therefore, as we await the pending legislation on motor vehicles, India could also mould regulatory models that apply specifically to “transportation network companies” or “aggregators”.
(Tenzin Namdol is part of the faculty on myLaw.net.)