The Motor Vehicle Aggregator Guidelines 2020 (“Guidelines”) were issued on 27 November 2020 as per the requirements and provisions of the Motor Vehicles (Amendment) Act, 2019 (“Amendment Act”) and further as per the amended Section 93 of the Motor Vehicles Act, 1988 (“Motor Vehicles Act”) which provided that while issuing the license to an aggregator, the state governments may follow such Guidelines as may be issued by the Central Government. The Guidelines have been formulated with an aim to regulate shared mobility and reduce traffic congestion and pollution. These Guidelines require the state governments to establish a regulatory framework for aggregators to ensure that the aggregators are accountable and responsible for the operations executed by them.
The term ”aggregator” has already been defined under the Motor Vehicles (Amendment) Act, 2019 to include a digital intermediary or market place for a passenger to connect with a driver for the purpose of transportation. The Guidelines cover vehicles that may be integrated by the aggregator and also include all motor vehicles under the Motor Vehicles Act including e-rickshaws.
For regulating the aggregators, the Guidelines specified by the Central Government may be followed by the state governments. As per the Guidelines, the license issued by state governments is a mandatory pre-requisite for permitting business operations by the aggregators having registered offices in India. The Guidelines have been formulated to ensure regulation of aggregators, vehicles and drivers, aggregator app and website, manner of fare regulation, driver’s welfare, service to citizens parameters and ensuring safety, evolving concepts like pooling and ride sharing in private car, license fees / security deposit etc.
The Guidelines, enable the government to achieve its goal of ensuring maximisation of using public transport, reduced fuel consumption and reduced vehicular pollution thereby reducing the harm to human health. The Guidelines mandate the state government to facilitate implementation of electric/alternate fuel (such as bio-ethanol) for two wheeler taxis. The Guidelines also mandate non-transport vehicle pooling may be provided by aggregator unless prohibited by state government.
The Guidelines also provide for penalties to be imposed on the aggregator in terms of suspension of license and cancellation on multiple grounds including failure to ensure safety of the riders, charging higher rates repeatedly and failure to comply with the contractual obligations towards drivers. If the aggregator receives more than three suspensions in a financial year, its license will be cancelled and the aggregator will be forced to stop operations with immediate effect. The Guidelines also provide for a procedure of appeal to state government by the aggregator whose license has been cancelled.
App based taxis would directly be covered under these Guidelines. Apart from laying down standards and framework for regulating the aggregators and setting a limit to surge pricing, these Guidelines take some important step for reducing traffic congestion and pollution. It comes at crucial time when the Supreme Court, Delhi High Court and National Green Tribunal have intervened time and again with a number of directions being issued to the Centre and states with the objective of minimizing congestion and reducing pollution levels caused due to emissions from motor vehicles. The Courts have also attempted to address the issues of fuel efficiency and lower emissions through continuing mandamus in the matters of MC Mehta v. Union of India (Writ Petition (Civil) 13029 of 1985) and Vardhaman Kaushik v. Union of India (Original Application No. 21 of 2014). The importance of shared mobility over private vehicle ownership to reduce congestion and pollution in urban agglomerations, was also highlighted in the Delhi High Court order dated 21 December 2016 in the matter of Association of Radio Taxis v Bhavish Aggarwal & Ors (CONT.CAS(C) 643/2015).
Contributed by: Nawneet Vibhaw, Partner; Upama Bhattacharjee, Senior Associate
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