Written By Naveen Menezes & Alnoor Peermohamed, ET Bureau<\/p>\n
BENGALURU: Ola\u2019s licence to operate cab services in Karnataka is set to be restored after it pays a penalty levied by the state transport department, possibly as early as Monday.
\n\nThe transport department has decided to lift the six-month suspension imposed on Ola on Friday for running \u201cillegal bike taxi services\u201d in violation of its licence after the chief minister intervened.
\n\n\u201cI convened a meeting on the directions of chief minister HD Kumaraswamy. The chief minister wants the suspension order to be revoked and I have conveyed the same to the officials,\u201d Karnataka chief secretary TM Vijay Bhaskar, who held separate meetings with the transport department and Ola representatives on Saturday, told ET. \u201cIt\u2019s up to the department to decide on the penalty.\u201d
\n\nOrder has \u2018Served its Purpose\u2019<\/b>
\nSocial welfare minister Priyank Kharge said that neither he nor the chief minister could be part of the meeting with the transport department and Ola representatives due to the election code of conduct. \u201cThe issue has been resolved,\u201d he said. \u201cOla has agreed to pay the penalty on Monday. Cab services will not be affected.\u201d
\n\nThe amount will be decided by State Transport Authority, a quasijudicial entity, on Monday. \u201cI cannot decide (the penalty) on my own,\u201d said transport commissioner VP Ikkeri. \u201cThe question of how much the penalty is going to be is like asking a judge what his judgement is going to be.\u201d If Ola does not pay the penalty, the department will act as per the law, he said.
\n\nOla declined to comment. On Friday, it said it would work with officials to resolve the matter. \u201cUsually we levy a penalty of Rs 50,000 per offence,\u201d said a senior transport department official who didn\u2019t want to be named. \u201cSince it\u2019s a very different violation, we will have to study the number of offences Ola has committed. We may have to seek legal opinion too.\u201d The transport department believes the suspension order on Ola had \u201cserved its purpose\u201d, the person said.
\n\u201cIn spite of warning Ola multiple times over the last one month, they continued to operate illegal bike taxi services on their platform,\u201d he said. \u201cWe had even seized two-wheelers, but in vain. It\u2019s only when we warned them of withdrawing the licence that the company has removed bike taxi services on Friday.\u201d
\n\nOla will be keen on getting the suspension lifted as quickly as possible. \u201cTo an organisation the size of Ola, I would expect that any fine the government would levy would not be material,\u201d said Vikrant Kumar, a partner at law firm L&L Partners. \u201cWhat will really affect Ola is if the direction (suspension) is upheld, because the revenue loss over six months will be severe and will give a huge boost to its competitors.\u201d
\n\nThe transport department ordered the company to suspend all operations, including four-wheeler cabs, within the next three days in a letter sent to Ola parent ANI Technologies Pvt. Ltd. on March 18. \u201cThis notification is unfortunate, and we look forward to an opportunity to address these concerns directly with state officials to find a solution for our driver partners and millions of Ola users in Karnataka,\u201d Ola had said in a statement.
\n\nThe state transport department had issued a notice to Ola February 15, warning the company that it would suspend its aggregator licence if it did not comply with the ban on bike taxis. ET had reported this development on February 18, after which the state said it seized more than 400 bike taxis attached to Ola and rival Rapido.
\n\n\u201cRegulatory run-ins for ride-hailing companies aren\u2019t an Indiaspecific issue; this happens in many other markets including fairly advanced economies,\u201d said Devangshu Dutta, chief executive of consulting firm Third Eyesight. \u201cThe constant gripe that traditional taxi players have is that they are forced to follow strict rules, whereas ride-hailing firms are not as strictly regulated, and this has created tension everywhere.\u201d
\n\nBengaluru, where Ola is headquartered, is also its single largest market in the country. The city is estimated to have 120,000 cabs, out of which around 65,000 operate on the Uber and Ola platforms interchangeably, state authorities and experts said.<\/p>\n\n