The recent controversy over taxi-hailing service Uber and the ban imposed on its operations by the Delhi government, once again puts the spotlight on its business model. The key question to be answered in India is whether Uber is a tech company or a radio taxi company. The action taken by the Delhi police and their statements after last week’s incident suggest that it is treating Uber as a radio taxi company, while it has been all along maintaining that it is just an aggregator of taxis.
Experts say it is important to define the status in India of Uber that it is in the centre of a controversy after a woman, who hired a cab using the company’s app, was raped allegedly by a driver. “Lawmakers need to pay enough attention,” said Antony Alex, a lawyer and CEO of Rainmaker, a firm that provides online anti-sexual harassment training to corporates.
If Uber is treated as a radio taxi operator:
Then greater liability could attach in respect of the current fiasco, as it had to comply with the transport department norms, said Mr. Alex.
Cabs ferrying customers in Delhi from point to point have to follow rules under the Radio Taxi Scheme, 2006. The norms stipulate that the licensee must be either a company under the Companies Act, 1956 or a society under the Societies Registration Act, 1860. The rules also say that the employers would be responsible for quality of drivers, their police verification, employer control and supervision of drivers and employee behaviour.
If Uber is treated as a tech firm:
Then it is like any other marketplace like Flipkart or Amazon, were it brings together the driver and the customer. “If a customer has a complaint, then Uber has to resolve it through the taxi owner, just as Flipkart or Amazon would do with the manufacturer of the product,” said Mr. Alex.
If Uber is a tech company, then they are not liable for the current fiasco. However, he pointed out, there could be a catch here. Uber has been running schemes which offer subsidised rides to customers. “By doing this, Uber is showing that they are in the cab operating space,” Mr. Alex said.
Uber has faced protest from drivers in Germany and other European Countries on its business model.