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The Evolution and Challenges of Ride-Hailing Services in India

The Evolution and Challenges of Ride-Hailing Services in India


Since its introduction, ride-hailing services like Ola cabs and Uber have “disrupted” India’s public transportation system. With these aggregators already functioning in more than 100 Indian cities, app-based ride-hailing has been a constant fixture of urban and peri-urban India for almost seven years. Everyone has heard of Uber, the mobile application that links drivers and passengers, and how it recently revolutionised the taxi business. It is also commonly known that technological advancement has created a fixed-cost paradigm that does not require government rules. The busy world we live in today requires quality, effectiveness, and reasonable rates. 


Ridesharing is nothing new. During World War Two, it started. To conserve rubber during the war, the American government mandated ridesharing arrangements in workplaces in 1942 when there were no other transportation options (Chan and Shaheen, 2012). The oil crisis and rise in gas prices in the 1970s prompted a new era of ride-sharing. But, the introduction of GPS, smartphone technology, and electronic payments allowed for the current ridesharing revolution. Kowshik et al. (1993) predicted a dynamic ridesharing future that would use better matching techniques in the early 1990s and would be similar to what is possible now.


Platforms for ridesharing bring together drivers and cars with passengers looking for rides at a set cost. A customer often uses a smartphone app to order a ride at a specific time and location. The customer is then guided through a number of steps by the phone app, including the ride’s real or anticipated cost, the driver’s location, and the anticipated wait time. Additionally, it enables the communication between the consumer and the driver without disclosing any private information. These platforms use GPS to plan the ride and identify the optimum route for the driver.


Road transportation in India is predominantly within the legislative purview of State administration because it is listed in the State List of the Seventh Schedule of the Indian Constitution. The Motor Vehicles Act of 1988 is the primary law governing road transportation vehicles. It establishes numerous criteria and regulations for holding particular permits for transportation vehicles. The Act also gives state governments the authority to enact regulations governing taxis. State governments have created radio taxi systems that control the operation of conventional radio taxis in order to exercise this ability. On the other side, the Information Technology Act, 2000, which includes laws governing e-commerce and cybercrime, offers the legal foundation for IT businesses. 

There doesn’t appear to be a national regulation in India that is explicitly designed to control digital aggregators like Uber, although efforts are being made to create one. The nation’s Ministry of Road Transport and Highways released advisory rules in mid-October 2015 for states to follow when policing firms like Uber and Ola, which refer to themselves as “on-demand information technology-based transportation aggregators.” Also, rules governing IT-based transportation aggregators are included in a draught law called the Road Transport and Safety Bill, 2015, which is still in the consultation phase. These provisions include a statutory definition of these firms. 

The regulatory issues that Uber has encountered over the past few years seem to have originated in Delhi, the National Capital Territory of India, the country’s capital. After a 26-year-old female customer was allegedly sexually assaulted by her driver, the Delhi government issued a general ban on all app-based taxi services, including Uber, on December 8, 2014. 

India’s Motor Vehicle Act of 2020 allows individual states to set regulations for ride-hailing aggregators, Delhi, Mumbai, and Bengaluru have all developed their own policies that are vastly different from one another.


The southern Indian state of Karnataka has prohibited auto rickshaws from being advertised on ride-hailing applications such as Uber and Ola. The decision was made in response to user concerns about being overcharged.

Bangalore, Karnataka’s capital city, has begun fining three-wheeler drivers who continue to use these applications for 5,000 rupees.

Delhi, has ordered that all bike-taxis operating in the city convert to electric vehicles.

In Mumbai, aggregator platform licences are under threat due to an ongoing lawsuit accusing apps of failing to provide adequate grievance redressal methods.

Rapido’s application for a bike taxi licence in Maharashtra is denied by the Bombay High Court.

Uber has set a 2040 target for 100% of its rides to be in zero-emission vehicles, public transport or with micro-mobility.

New Delhi city authorities have warned Uber and its rival Ola for allegedly violating local transport rules by providing two-wheeler bike taxis.


Ride-sharing is an innovative on-demand transport service that aims to promote sustainable transport, reduce car utilization, and increase vehicle occupancy and public transport ridership. Ride-sharing aims to minimize negative impacts related to emissions, reduce travel costs and congestion, and increase passenger vehicle occupancy and public transit ridership.

Finally, the entire debate demonstrates that online app-based ride-sharing is becoming increasingly popular, but the disturbing reality is that the Ride Sharing Guideline does not provide enough guarantee to the public to keep them secure with their privacy. Furthermore, the requirements are not precise enough for the unprofessional attitudes of online app-based ride-sharing drivers. Although we think that online-based ride-sharing has made our mobility more convenient, it should have a firm and suitable direction with codified regulation so that it can be readily managed without any disagreement. “The expansion of ride-sharing and other improvements imply that legislation must be for the next decade, not the last,” stated the interim director of TFL (Transport for London) in a statement.

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