Ola Cabs has added yet another red mark in its long list of violations and controversies when its license to ply in Karnataka was banned for six months by the transport department; and then in a sharp U-turn, Karnataka Government revoked the ban within 48 hours.
- The Karnataka Transport Department revoked the license of Ola Cabs to operate in the state for six months due to unauthorized operation of bike taxis.
- The ban was the result of petitions from several taxi driver associations in the state asking the department to take action against the firm
- Amid rising chaos on social media, the Karnataka government made a sharp U-turn on Sunday, revoking the suspension handed to Ola within two days of issuance
- Ola has been operating pilot programs for bike taxis in Bengaluru since 2016 even after the state restricted them. Uber had paused its bike taxi service Bengaluru in May 2016
In a dramatic turn of events, the Karnataka State Transport Department revoked the license of Indian unicorn Ola Cabs for six months in the state, before making a U-turn with 48 hours of the original decision.
The action came after Softbank-backed Ola was found in violation of guidelines for cab aggregators. The ride hailing service was allegedly operating two-wheeler taxis without permission. Several taxi drivers’ associations petitioned the department to take action against the firm which led to the state-wide ban. As per the order from the Karnataka Transport department:
“Based on the report given by senior officials in the Regional Transport Office, the licence given to M/S Ani Technologies Pvt Ltd, Ola Cabs to operate taxis till June 19, 2021 has been suspended under The Karnataka on Demand Transportation Technology Aggregators Rules, 2016,”
Ola also issued a statement in return showing its concern for the government notification. The company said it looked forward to an opportunity to address the concerns directly with state officials to find a solution for its driver-partners and millions of Ola users in Karnataka. The statement from Ola said:
“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,”
It should be noted that Ola’s statement pointed out that other companies continue to operate illegally. Ola might be referring to Rapido, the other company that operated bike taxis in Bengaluru.
ET had reported a while back that Ola was operating bike taxis on a pilot for a week in the state. This seems a repetitive limbo as Ola had first launched the bike taxis in Bengaluru almost three years ago.
Back in 2016, Days after launch, the Karnataka State Transport department had deemed Ola’s and Uber’s bike taxi services
illegal, as the companies did not have right permits to operate motorbikes as commercial vehicles in the city.
Dr Ramegowda had told MediaNama that Ola and Uber needed permission from the state RTA to operate in the city, and they were in violation of the central Motor Vehicles Act. Uber “paused” its bike taxi service in Bangalore in May 2016.
Currently, only Goa and Haryana have allowed bike taxis to run, although Telangana, Rajasthan and UP started permitting bike taxies last year. Most state transport departments do not have adequate laws in place for this new model of public transport.
Controversy heats up in the aftermath
The Karnataka government on Sunday announced that it had revoked the suspension handed to Ola. As per the tweet by the Social welfare Minister of Karnataka, Priyank Kharge, there is a need to update government policies as per the latest innovations in technology field. He also requested the industry to work closer with the government on this matter so that a better infrastructure can be built to catalyze the growth and evolution.
This puts a question mark over the policies and set of rules plying in India when the economy is rapidly shifting from brick and mortar establishments to digital platforms. Most policies lag behind the changing needs of the society, especially in the field of technology. It is paramount that all such policies are amended on a regular basis to provide sustainable and feasible support to a dynamic industry.
It has also been reported that the Social Welfare ministry has tied up with 21 firms, including Ola, for a rural entrepreneurship scheme.
Unhappy with the revocation of the ban, leader of a cab drivers association Tanveer Pasha, who is also affiliated with the JD(S), stated that drivers would meet the Transport Commissioner to urge him not to revoke the ban. He said:
“Ola should be punished for its mistake. We will launch a protest if they revoke the ban,”
With the controversy gathering steam, Karnataka CM Kumaraswamy tweeted late Sunday that he had authorized the chief secretary to look into the issue.
The ban has come increasingly under fire, with social media ripe with condemnation and few drivers protesting through campaigns online.
Ola has a knack for controversies
This is not a first, when the Cab aggregator has made the news for wrong reasons. Ola has a serial habit of coming up with controversies.
- In July 2015, a male passenger from Delhi alleged that the driver of an Ola Cab threatened him with physical harm after he refused to compensate for the car’s ‘failed’ brakes.
- In September 2015, a Chennai based user claimed that Ola had leaked personal details such as mobile numbers, locations of 100 users to her mobile via text messages. Ola had blamed the error on a technical fault.
- In April 2016, angered protestors urged a boycott of Ola services, for a controversial ‘sexist’ advertisement. The YouTube ad which featured a couple shopping in a market, ended with the tagline – “Meri girlfriend chalti hai Rs. 525 per km, but Ola Micro chalti hai sirf Rs. 6 per km.” It sent Twitter on a frenzy as Ola was slammed for the “sexist portrayal of women.”
- In April 2018, a woman who had hired a TaxiForSure cab through Ola received a derogatory MMS from the driver after she was dropped at her destination. In a similar incident from July 2015, a woman has alleged that the driver of a TaxiForSure cab she was travelling in Delhi, acted inappropriately and obscenely during the ride.
- In May 2018, Ola claimed that their newest venture, Ola Auto will travel four kilometers in Rs. 29 only, but had failed to include the qualifier of ‘Terms and Conditions apply.’ The Adverting Standard Council of India’s (ASCI) Consumer Complaints Council (CCC) registered a complaint against the company.
The Ola ad created quite a frenzy in 2016 for its sexist portrayal of women.
Ola hasn’t been shy of controversies across different geographies where it plies its trade. One wonders if the indigenous app-based taxi hailing service is more centric towards controversies than its customers?
Ola acquired Taxi For Sure in 2015 which has faced multiple allegations of misbehavior towards women passengers
The repeated controversies and the half-baked resolutions are not worthy of a Unicorn. It surely feels like Ola is living in its own dreamland of fortune and funding, putting customer centricity and service satisfaction on the back foot.
A mammoth with a risk of extinction
The Karnataka government noted that Ola’s response to a probe it carried out regarding illegal operation of bike taxis was not satisfactory, thus forcing it to serve a notice. This is not the first time that Ola’s response has been unsatisfactory to allegations, inquiries or probes.
Till now, it involved discontent users. But now directly dealing with the authorities, it’s a totally different ball game where the stakes of loss are much bigger for Ola.
In the growing startup ecosystem, a fundamental aspect behind any new venture is how it improves the life of its users. Ola’s vision does sing this tune but with growing incidents, it seems the unicorn is off its course, getting numerous allegations of harassment, safety and insecurity.
Such negative publicity is damaging for Ola, with a growing sentiment that service provider has a knack for ignoring rules and ensuring safety of passengers at all stages.
Now Ola has taken on the government as well, being on the front foot operating services without due approvals in the state.
Union Minister stated that the ban hurt more than 40,000 drivers.
This signals an alarming situation where the founders need to come out with a ‘get your hands dirty attitude’ to ensure Ola isn’t so frequently in the news for the wrong reasons.
It will be a sorry story if such issues and negligence bring about the downfall of one of the biggest unicorns of the Indian startup ecosystem.
- Ola Cabs has a knack of disregarding norms, with a long array of controversies linked to the cab aggregator since its inception.
- The ban has came under fire on social media, saw online campaigns from drivers, and comments from Union Minister D V Sadananda Gowda stating the ban hurt more than 40,000 drivers.
- Priyank Kharge, the minister who tweeted the revocation of the ban of Sunday, runs a rural entrepreneurship program through his ministry, which is backed by 21 firms including Ola.
- Taxi Drivers Associations in the state are not happy with the revocation and have decided to take the matter up with the transport commissioner.
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