Regulating App-based Taxis

In the last week of June 2019, the Karnataka government banned car-sharing/ride-sharing services by taxi aggregators like Ola and Uber in Bengaluru citing that their ride-sharing services are illegal as there is no relevant legal provision to cover such services in the Karnataka On Demand Transportation Technology Aggregators Rules, 2016, which currently govern the operation of taxi aggregators in Karnataka. Undoubtedly, these ride-sharing taxi services, wherein multiple passengers avail the same transportation facility at the same time along a common route, are an ideal supplement to public transit. This facility is very likely to minimise travel costs, level of greenhouse gas emissions, traffic congestion, etc.

Although the shared mobility service has its own benefits, these taxi hailing services do not fit into our existing legal framework. The civil liability of the taxi aggregators like Uber and Ola for the damages caused by the car drivers during the course of ride is uncertain. The inevitable question which arises is whether these car drivers are the employees of taxi aggregators who hire them to provide transportation services. Instead, taxi aggregators have stated time and again that the car drivers who register with them to provide transportation services are not “employees,” but “independent contractors” and, therefore, ineligible for any employee benefits. Legally speaking, as far as the manner of execution of the work is concerned, an independent contractor is not under the direct control of the person who has employed them to do the work. On the other hand, an employee acts under the direct control and supervision of their employer. Thus, the employer is not vicariously liable for the tort committed by independent contractors in the course of work.