The entry of cab companies like Uber and Ola into the bike taxi space has suddenly put the spotlight on this nascent, 3-month old bike-taxi industry in India.
Nobody Is Above The Law:
Taxi-hailing services Ola and Uber launched their respective bike-taxi services in Bangalore, almost on the same day- March 3. They had to abandon their service the very next day, in an instance of insensitivity and hardcore stand on such businesses, Bangalore Transport department deemed them “illegal”.
As per commissioner of Transport and road safety, these companies were running their bikes on white board, which cannot be used for commercial purpose. Operating non- transport vehicle as commercial vehicle invites a penalty of Rs 5,000 in Bangalore. That’s exactly what transport dept did and seized their vehicles. In fact, it was bikes of private owners whose vehicles which were seized.
“We are not against the business, we are against violators. Let them send a permit request to Regional Transport Authority and then we might give them permit. Who would be responsible of eventualities? There was no notice to department, no permits sought, then how could Ola or Uber start their (bike) businesses?”, asked Dr Ramegowda, Commissioner of Transport.
Desperate Attempt To Catch Market Share?
Uber tried following a model- which presently companies like Baxi are running in Gurgaon. Uber first implemented it in Bangkok and tried the same in Bangalore. Repercussions were bad!
Difference was, companies like Baxi-who are not even interested in starting their services in Bangalore- work only with bikes that have yellow number plates, while they still work on a ride share model with private vehicles. Customers cannot hail these private vehicles to take rides, and can only book using the mobile app. 65% of their trips originate offline, where a customer just walks up to a Baxi stand and gets on to a bike.
Homework was done! All permits were sought and cleared before hitting the road.
The Big 2 failed to adopt this! They just had a service where you can book a bike ride through app and get picked up from desired destination. The pillion was given a helmet. And these bikes were maneuvered around by the bike owner. These bikes had white number plate, which could not be used for commercial purpose and could not be distinguished in the traffic.
When contacted by NextBigWhat team on this issue, Ola refused to give any comments.
How Will It Effect The Market?
Sitting on a heavy $$$ and plunging into a lot of businesses will most likely create a disruption in the transport space. More than a sustainable growth there will be a mess up in the market. We have witnessed the same in the past when food delivery market saw a lot of companies shutting their business.
Big companies can afford to pay higher incentives to their drivers ( thanks to richie-rich investors). This increases the price point of drivers across. At some point such companies are attracted to make money and in order to turn to profits, the incentives are cut down and that is when ‘Tiny Owl’ incidents happen!
Several bike-taxi services in Gurgaon and UP are working in tandem and collaborate on common requirements like bike stands, widening the biker pool and dealing with the government.
Whose Road Is It Anyway?;
It is tax payer and public which needs to come out of trouble! Nobody wants to be struck in traffic for hours in a city like Bangalore which has the slowest moving traffic in India. If, services are solving the problem of public, then there has to be a mutual consent in implementing the best possible solution. Local state-run transports are worried about their balance sheets and hence do not entertain.
Solving a common problem of Traffic is justifiable but, do companies need to do it at the cost of breaking laws? Some states have been very welcoming about bike taxis and have even allowed them to run their services.
Based on condition of anonymity, a founder of one such company from Haryana said that ” Haryana government was very supportive. They passed and cleared papers in less than a week. All you need to show is some respect and good business proposal.”
Bangalore government has been very less progressive about such services in city. In the past too, a bus shuttle aggregator was banned. With such moves a lot of startup businesses are shifting their base to Gurgaon and other friendly-states. Is such moves driving the reputation of Bangalore being the startup-hub to other cities in India?
During the Budget 2016-17, Union Minister Arun Jaitley had called the transport sector as the most unreformed sector in India. And, he also announced slew of measures for the sector in this financial year:
“The MVA act will be amended. This will help reduce “permit raj” and increase private entrepreneurship through START UP INDIA in the public transport sector.”