Effect of motor vehicle (amendment) act, 2019 on cab hailing platforms.

There was a recent amendment in the Motor Vehicle act which created a nation-wide ruckus and unrest among the populace. The inception of this act dates back to 1914, when it was FIRST passed by the Indian Parliament, but was replaced in 1988 and was enforced legitimately on 1 July 1989. It was drafted in order to regulate all the avenues and aspects related to road transport vehicles. There are detailed legislative provisions of registration of a motor vehicle, licensing of drivers or conductors all the traffic rules, controlling permits and penalties etc.  The central objective of this act was to act as a deterrent for road rage crimes and provide guidance and supervision of operation of motor vehicles in the state of India, legally.

On July31, 2019 the Rajya Sabha cleared a new amendment in this act which wholly includes very high spike in the penalties for traffic violations, absence of legitimate motor vehicle documents, juvenile drivers, mandatory Aadhar card for obtaining driving license, environmental damages done etc. Not only the people but also major industries and companies (like Ola, Uber) were majorly affected.

Under the new amendment of section 93 of the act, the term aggregator has been introduced and defined as “a digital intermediary or marketplace for a passenger to connect with a driver for the purpose of transportation”. A Cab aggregator is used for connecting to driver for transporting.

The New laws introduced through the act are directly applicable to Ola and Uber, which are:

Identification as digital intermediaries

The cab aggregators like Ola and Uber will be recognized as digital intermediaries under section93 amendment and the newly added section 1A of the principal act. Consequences of such recognition would be that cab hailing platforms would now be subjected to the motor vehicles act 2019 which makes the Information Technology act 2000 directly applicable on them as well. Under section 72 and 66E of the IT act, Ola and Uber can now be penalized for breach of privacy including offenses of misuse of private information of consumers like the debit card details, phone number and UPI shared etc.  And as a whole the section 85, acts as a deterrent for obligatory compliance to the IT act, 2000 by all the companies. The cab aggregators shall obtain license from state authorities, subjected to the central guidelines. It is a mandatory practice whose non compliance shall result in paying of a fine of Rs.25k to Rs.1 lakh which is laid down in the section 193(2) amendment of the act.

Governance by state and central laws

The cab aggregators prior to this act were not governed directly by any state legislation. But after the enactment of the act, the states can create customized guidelines for license procurement etc. In case of any conflict between central and state laws, the central laws shall hold sway as this act is a subject matter of the concurrent list. Moreover the influence of centre on aggregators is visible through mandatory compliance of the provisions of the Motor Vehicles Act,1988 including  section 96(2) Clause (xxxiib) of the Motor Vehicles Act,1988( the promotion of effective competition, passenger convenience and safety, competitive fares and prevention of overcrowding.)Etc. Previously, Ola and Uber could independently decide on the no. of passengers and pricing applied accordingly through, micro, Uber pool and Ola share. The implementation of the rule of fair pricing and passenger convenience in section 96 is on the responsibility of the state authorities, and non compliance shall amount to hefty fines which is also a responsibility of the state officials.

Penalization of Hand held devices

Highly intensive use of the hand held devices like mobile phones and GPS for navigation are the core of the business models of Ola and Uber due to their digitalized genre. However this practice has been categorically penalized under section 67(iv) of the act where the drivers stand to be held guilty for usage of such devices and payment of fines ranging from Rs.1000-Rs.5000 has been laid down which is an increase from previous fine of 1k. This amendment has been included as an explanation clause of section 184 which penalized dangerous driving by drivers without comprehensive explanation of the actions causing it. Therefore such provisions can prove to be harmful for digitalized platforms heavily dependent on such devices.

The centre has amended the principle act but it is for the state to focus on its implementation and frame policy complying with the local issues of each state, like traffic congestion etc. This amendment was instituted to regulate and induce fairness in usage of insurgent cab hailing platforms, which recently an the Uber spokesperson acknowledged by  quoting that “We welcome the Motor Vehicles Amendment Bill, 2019 which acknowledges that technology and innovation play a key role in transforming India’s mobility landscape. We will continue to support the government’s vision to harness technology for shared mobility and safety,” However breakout of strikes around the country by numerous taxi drivers including Ola and Uber taxi drivers symbolized how negatively the amendment affected a proportion of population.

By-

Sanskriti Rastogi

Student Reporter INBA