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Karnataka’s bike taxi standoff reveals how to not regulate city transport

by Index Investing News
May 3, 2025
in Opinion
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The Karnataka authorities is tying itself in knots over its resolution to ban two-wheeler bikes and scooters as taxis, popularly referred to as bike taxis. And it has solely itself guilty for the present mess—even because the livelihoods of an estimated 150,000 bike taxi operators and the day by day commutes of lakhs of residents grasp within the steadiness.

Learn this | Mint Primer | Bumpy: Impression of Karnataka Excessive Court docket ban on bike taxis

Earlier this week, the Karnataka Excessive Court docket, in an interim order, stayed the implementation of its personal directive issued earlier this month banning bike taxis from working within the state. The court docket had beforehand ordered that bike taxis stop operations inside six weeks of its ruling. The ban was to take impact from 15 Might, which has now been stayed for six weeks.

The state authorities’s objections to bike taxis stem from two points. First, it argues that the Motor Automobiles Act, because it at the moment stands, doesn’t acknowledge two-wheelers as taxis. It subsequently contends that bike taxis are, technically, an unlawful service.

The second objection is revenue-based. Three-wheelers and automobiles operated as taxis pay a bunch of taxes and charges to state governments and metropolis administrations—for registration, licences, permits, meters and certifications. Bikes and scooters at the moment working as taxis, however, are basically non-public autos that pay a one-time, lifetime highway tax.

The primary objection is legitimate. To guard clients, there have to be guidelines and laws in place concerning which autos are allowed to function as taxis, whether or not the operator (rider) is correctly licensed to drive a two-wheeler, and whether or not the car is match for public transport and meets minimal security requirements.

It’s not as if the federal government has any ideological objection to the concept of two-wheeler taxis. The truth is, the Ministry of Street Transport and Highways notified a ‘Lease a Bike’ scheme again in 1997, beneath which clients may lease a two-wheeler for private use on an hourly, day by day, weekly or longer foundation. From there, it’s a pure extension to permit a consumer to lease a two-wheeler for a trip, however be pushed by another person. The identical precept applies to rental automobiles and limousine companies in any case.

Additional, the Karnataka authorities even notified an electrical bike taxi scheme in 2021, permitting aggregators to function electrical two-wheelers as taxis. This scheme was withdrawn in 2024, citing “issues of safety” and “misuse” by aggregators.

Learn this | Greater than half of Uber’s 1 million fleet within the nation includes bike taxis and autos

Nevertheless, bike taxis have confronted stiff opposition from autorickshaw operators, who’re hardest hit by the cheaper different bike taxis supply. Bengaluru has witnessed a number of cases of autorickshaw operators blocking bike taxis and even threatening and assaulting them.

The auto operators are additionally higher organized, with robust, politically well-connected unions. This political patronage and canopy is the rationale autorickshaws blatantly refuse to journey by metre and fleece clients with out worry of blowback. With the potential exception of Mumbai, it’s tough to seek out any city or metropolis in India the place autos settle for fares on the authorised and metred charges.

Because of this it’s tough to take the federal government’s protestations concerning the absence of guidelines and pointers because the ostensible motive for the ban at face worth. In spite of everything, the Karnataka authorities has had a decade to work out an answer—since Rapido commenced bike taxi operations in Bengaluru way back to 2015.

Learn this | Pavan Guntupalli: On a Rapido trip

The truth is, neighbouring Tamil Nadu, which additionally initially banned bike taxis, is now within the strategy of framing guidelines, together with regulated and capped fares, restrictions on surge pricing, and stringent necessities for aggregators onboarding bike taxi riders onto their platforms.

So it may be finished. The absence of motion is definitely emblematic of the bigger malaise affecting city public transport in India—significantly with regards to last-mile connectivity. Generally, offering that has been largely left to para-transport operators: unregistered e-rickshaws, items autos transformed to shared folks transport, share autos and the like.

Governments—not simply the Karnataka authorities—have, as an alternative of framing guidelines and laws that present a fairly degree taking part in subject for every type of operators, tended to behave in favour of the organized and politically linked taxi and auto unions, and in opposition to the pursuits of the buyer.

Journey-share apps like Ola and Uber grew in India due to the sharp distinction in fares they supplied in comparison with the ‘official’ metre charges. Metred taxis (once more, Mumbai is the exception) had been additionally more and more tough to seek out, as the provision of taxi permits was tightly managed by vested pursuits defending their turf.

Bike taxis, equally, created a marketplace for themselves by providing an inexpensive resolution to a urgent want. Banning them will assist autos and cabs, however punish the buyer. 

Additionally learn | How one can develop bike-taxis (past issuing clarifications)

After all, there are dangers concerned. Two-wheelers are intrinsically much less secure than automobiles, and marginally worse than autos. However that call—of excessive danger versus decrease fare—ought to be left to customers to make. 

The federal government ought to be sure that, at a minimal, bike taxis meet (or ideally exceed) the identical KYC necessities and security requirements set for personal two-wheelers and different public transport service operators. And it ought to guarantee these guidelines are successfully enforced. Something past that smacks of overreach.



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