Uber: The Alibaba of India

It’s official. US-based taxi-hailing service Uber again played with fire on Friday after it restarted operations in New Delhi without waiting for an approval from the transport authority. The company, banned in the national capital a month ago by Delhi’s Transport Department after a woman alleged she was raped by a driver she booked using the Uber app, has finally given in to the demands of the Delhi government and applied for a license under the amended radio-taxi legislation in Delhi on Thursday. The case triggered protests and re-ignited debate about the safety of women in Asia’s third-largest economy.


“They [Uber] are misleading if they are saying they are operational,” said Anand Tiwari, an official at the Delhi Transport Department. “If they continue to do like this, we will not process their application [for a radio-taxi permit],” Tiwari added. Special Commissioner of Police (Traffic) Muktesh Chander said Uber cannot operate without getting the regulatory clearances from the concerned authorities. However, Uber’s app showed taxis available for booking in New Delhi on Friday.

The authority has directed enforcement agencies to confiscate vehicles plying on Delhi roads through the Uber network. TaxiForSure and Olacabs have also applied for licenses while continuing to operate in the capital. A similar operation has been launched to confiscate vehicles operating through the network of Olacabs, which was also banned.

Uber has applied for a license through a subsidiary, Resource Expert India, registered in Bengaluru and with an office in Pitampura in Delhi. The subsidiary would help Uber avoid any liability in the future and it remained to be seen if the subsidiary could apply under a different name, even as the mobile app continued to be called “Uber”.  As per the 11-page license application, the licensee will have to maintain a fleet of 200 radio taxis owned or through an agreement with individual taxi permit holders as well as take responsibility for any shortcomings.

Uber, hoping to get the license “soon”, decided to restart operations after its drivers staged a protest for three days and consumers demanded the company start services again.   Trying to launch itself back in the market and to regain people’s trust, Uber justified that this step reflects their commitment to providing riders with new options for safe and reliable transportation, including the ability to request a radio taxi on demand. Uber is offering its drivers in Delhi a bonus of 250 rupees for every trip until Jan. 31. “We wanted to party after the service restarted, everyone is very happy in the family,” a driver said.


Changing Tech Scenarios:

Further, Uber will work with the authorities and do “anything and everything to be compliant” with the amended radio-taxi regulations that even includes clauses contrary to the company’s business model. Under a Supreme Court mandate, all public vehicles in Delhi have to run on compressed natural gas (CNG), considered as a major impediment to the expansion of Uber and its likes. However, Uber will build a CNG car network, parrying questions on the fate of drivers who had petrol or diesel cars, many of whom have taken loans to buy their vehicles.

Nevertheless, the development comes as a relief to Uber’s big network of drivers. It said it had strengthened security checks after an alleged rape led to the ban. The company also said though it had applied for a license, it would give users an option to book a radio taxi alongside its previous services that would continue as before. (What????)

Uber up until now has insisted that it is a technology service connecting drivers with potential riders and taxis in their network were different from radio taxis as the latter could be hailed from the street, while the former could only be booked through the app. A bit hypocritical, don’t you think? First it says it will convert to radio taxis and then justifying how it’s different from them?

“As we resume operations in Delhi, we are only allowing driver-partners who have undergone re-verification of their Police clearance in the last six weeks to get back on the platform. For an additional layer of screening, we are implementing independent background checks on all driver partners, plus vehicle documentation reviews. Our teams have worked tirelessly to develop new safety features (including an in-app emergency button) nationwide, establish a dedicated incident response team and re-verify the full credentials of every driver-partner on the Uber platform in Delhi,” said Uber in a statement.

International Havoc:

India is Uber’s largest market outside of the United States by number of cities covered, and the country’s radio taxi market is estimated to be worth $6 billion to $9 billion. In Korea, Uber has already had to team up with another taxi firm to comply with local rules. It is also fighting bans in France, Spain and South Korea, imposed because some of its drivers were not correctly licensed. It has had to contend with further rape allegations against drivers in Chicago and Boston. Uber chief executive officer Travis Kalanick has promised to create 50,000 jobs in European cities where Uber can operate.

Summing up:

Uber said on its official blog that it would continue to engage with Delhi authorities to work toward the “Kolkata model” — which includes “new regulations for on-demand transportation technology aggregators.” In other words, a model that lets Uber be Uber — and not a taxi company.

Douglas H. Wigdor, the rape victim’s lawyer, in a statement to the media said that Uber had the “audacity” to send an email directly to his client informing that it has re-entered the market in Delhi, only weeks after the tragic incident. Wigdor said they had made it clear to Uber that the rape victim wanted to be part of a consultation process regarding safety procedures to ensure that no other person becomes a victim at the hands of an Uber driver. “Most unfortunately, this has not happened and we have no confidence that the touted ‘India-specific safety measures’ will prevent another attack,” he said.


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