Introduction:

In a significant development impacting the mobility sector and thousands of gig workers across Karnataka, the High Court of Karnataka recently expressed its inclination to stay the order banning bike taxis in the State. The proceedings arose in a batch of appeals filed by leading ride-hailing aggregators including Uber India Systems Private Limited, Rapido, and Ola, challenging a single-judge decision which prohibited bike taxi operations unless the State issued specific guidelines under Section 93 of the Motor Vehicles Act, 1988. The division bench comprising Chief Justice Vibhu Bakhru and Justice C.M. Joshi heard the matter on September 25, 2025. The petitioners argued that the ban was arbitrary, regressive, and contrary to the principles of mobility and right to trade. On the other hand, the State, represented by Advocate General Shashi Kiran Shetty, maintained that the aggregators were operating in violation of court orders and that the government had instead introduced the Gig Workers Act to address concerns of those using two-wheelers for delivery and other allied services. The Court, dissatisfied with the State’s inaction despite earlier directions to frame a policy, orally remarked that it was inclined to grant a full-fledged stay, though it adjourned the matter for final hearing on October 15, 2025. The dispute raises fundamental questions of governance, mobility, livelihood, and the scope of regulatory powers under transport laws.

Arguments of the Petitioners:

The petitioners, comprising major bike taxi aggregators and supported by individual bike owners, contended that the single judge’s ruling effectively shut down an entire sector of livelihood without a clear policy basis. They argued that Section 93 of the Motor Vehicles Act, which requires aggregators to obtain licenses, should not be interpreted as a blanket prohibition, especially when the State had neither notified guidelines nor provided a transparent regulatory mechanism. Senior Advocate Dhyan Chinnappa, representing bike owners, pointed out that the absence of registration facilities or contract carriage permits had left riders in a state of uncertainty. He submitted that platforms like Uber and Ola had allowed them to offer free services in order to comply with the ban, but if these avenues were completely shut, thousands of riders would lose their only means of livelihood. The petitioners further argued that the use of two-wheelers as bike taxis was an established model in other states like Delhi, Telangana, and Goa, where regulatory frameworks had been notified, and banning them in Karnataka without policy clarity violated the right to trade under Article 19(1)(g) of the Constitution. They emphasized that such services were not only efficient in decongesting traffic but also environmentally sustainable, offering affordable mobility for citizens. The aggregators argued that innovation could not be stifled merely because the State had failed to act within a reasonable timeframe. They also rejected the State’s claim of contempt, asserting that they had made adjustments in line with previous orders and were awaiting a regulatory framework to formalize operations.

Arguments of the State:

On behalf of the State of Karnataka, Advocate General Shashi Kiran Shetty defended the government’s stand by asserting that the petitioners were in clear violation of existing judicial directions. He emphasized that despite the absence of a stay, the bike taxi operators had continued to run their services, thereby showing blatant disregard for the orders of the court. He added that such conduct amounted to contempt. The AG further argued that the State had already taken steps to protect the interests of gig workers by introducing the Gig Workers Act, which allowed two-wheeler owners to engage in delivery services without mandatory registration. According to him, the aggregators like Uber, Ola, and Rapido were already included within the ambit of this Act, ensuring that the rights of riders were safeguarded. He contended that transportation of passengers by two-wheelers was a different category altogether and could not be equated with delivery services, hence requiring strict regulation. The AG underscored that the State was still in the process of taking a “conscious decision” on whether a separate policy for bike taxis should be framed, but until then, it was necessary to prohibit such operations to maintain law, order, and safety. He also highlighted concerns about unregulated operations, insurance risks, and passenger safety, which could not be addressed in the absence of clear statutory backing. The State therefore urged the Court to refrain from granting a stay and to uphold the single judge’s ruling.

Court’s Judgment and Oral Observations:

After hearing the arguments, the division bench of Chief Justice Vibhu Bakhru and Justice C.M. Joshi made critical oral observations highlighting the State’s inaction. The Court noted that in its earlier hearing, it had specifically asked the government to examine the matter at a policy level and had granted one month’s time to come back with a decision. However, despite this extension, the State had failed to present an appropriate policy on regulating bike taxis. Instead, the State introduced the Gig Workers Act, which the Court noted had limited applicability since it primarily addressed delivery services and not passenger transport. The bench remarked, “We are inclined to give a full-fledged stay at this stage. We had given one month’s time for the government to come up with some policy… nothing is done and you come up with Gig Workers (Act).” The Court further clarified that while it had not granted any stay earlier, the State was at liberty to take action against operators in violation of existing orders. However, the failure to come up with a regulatory framework despite repeated opportunities indicated policy paralysis. The bench indicated that it was strongly considering granting an interim stay on the ban to prevent undue hardship to riders and aggregators. Nonetheless, the Court posted the matter for a final hearing on October 15, 2025, stating its intention to dispose of the issue conclusively on that day.

The broader significance of this case lies in the Court’s recognition of the balance between regulatory authority and economic rights. By signaling its inclination to stay the ban, the Court underscored the importance of government accountability in framing policies that respond to evolving technological and economic realities. It also highlighted that judicial directions could not be used as a cover for inaction, especially when livelihoods of thousands were at stake. The judgment thus sets the stage for a critical policy debate on urban mobility, gig economy regulation, and constitutional rights.