Regulating the Olas and Ubers

In the last week of June, the Karnataka government banned car-sharing/ride-sharing services by taxi aggregators like Ola and Uber in Bengaluru contending that their ride-sharing services are illegal as there is no relevant legal provision in the Karnataka On-demand Transportation Technology Aggregators Rules, 2016, which currently governs 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, is an ideal supplement to the public transit system. This facility is very likely to minimise the travel costs, level of greenhouse gas emissions, traffic congestion, etc.

Although the shared mobility service has its own benefits, the main challenge facing it is that these 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 a ride is uncertain. The inevitable question which arises is whether these car drivers are the employees of the taxi aggregators who hire them to provide transportation services.

On this issue, taxi aggregators like Uber have stated time and time 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 him to do the work. On the other hand, an employee acts under the direct control and supervision of his employer. Thus, the employer is not vicariously liable for the tort committed by independent contractors in the course of work.

These taxi aggregators further contend that they only provide a convenient forum to connect the riders with the self-employed car drivers. In this regard, it is pertinent to note here that the relevant provisions of the Karnataka On-demand Transportation Technology Aggregators Rules, 2016, provides that the taxi aggregators must issue brand stickers and identity cards to the registered car drivers, organise at least one structured refresher training programme in a year, etc.

The taxi aggregators must also ensure that all the taxies at their command maintain uninterrupted contact with the control room and that the vehicles entered in their licence do not operate independently or accept bookings directly. They are continuously tracked with GPS and GPRS facility, with the provision of a panic button to alert the control room of the aggregator as well as local police.

Simply put, these taxi aggregators control the manner of the work carried out by these self- employed drivers, thus bringing them under the purview of “employee”.

On the other hand, Ola, Uber drivers who generally own the cars have freedom to work on their own time, thus giving them more control over their work schedule. They are also free to work for their company’s competitors. The Karnataka On-demand Transportation Technology Aggregators Rules, 2016, gives liberty to the registered car driver who is in operation under one taxi aggregator to operate his vehicle simultaneously with any other aggregator. This implies that the taxi aggregators have no absolute control regarding the time and manner of the work carried out by registered car drivers, thus bringing them under the purview of “independent contractors”.

To remove this ambiguity, the court opinion on the subject is the need of the hour. The much-needed clarity on the liability of taxi aggregators will also remove ambiguity with respect to insurance coverage policies in cases of damages caused by the drivers during the course of a ride.

The safety of passengers is a growing concern with respect to shared mobility services as it involves sharing the cabs with unacquainted people. High level of security technologies to help the rider in trouble, strict screening procedures for drivers, effective monitoring by the control room can, however, address the safety issues. The larger question to ponder over is the responsibility of the taxi-aggregators.

The answer to be sought is whether the taxi aggregators exercise sufficient control over the manner of work of the drivers so as to hold the former liable for the damages caused by the latter in the course of a ride. In this digital age the old definitions of employer, employee, independent contractor hold no relevance.

(The writer is Assistant Professor,
School of Law, Christ (Deemed to be University), Bengaluru)