Taxi Aggregators

In October 2015, India’s ministry of road transport issued guidelines for ride-hailing services such as Uber (Uber Technologies Inc.) and Ola (ANI Technologies Pvt. Ltd), identifying them as on-demand information technology-based transportation aggregators and not taxi companies, although it would be up to the states to accept or reject this. As per the guidelines, aggregators must not own or lease any vehicle, employ any drivers, or represent themselves as a taxi service, unless also registered as a taxi operator. Taxi operators are to maintain a minimum fleet size, office space and parking space for all taxis, among other requirements. Notably, as clarified by the ministry, aggregators must follow the same set of norms set by states for normal taxi operators. Taxi aggregators such as Uber and Ola have all along claimed that they are not taxi companies. What they do is connect customers with drivers through a tech platform, the front-end for the customer being an app. Undoubtedly, the growth in smartphones and smartphone apps have revolutionised this industry. Aggressive marketing, huge signup campaigns for driver-entrepreneurs, and funding rounds have got taxi aggregators a large market in India’s cities. These aggregators have proactively chased the biggest resource in the industry – the drivers – and have been expanding at a rapid pace in the past one year.