DISRUPTOR DISRUPTED

A chastened Uber agrees to play by Delhi’s rules and act like a taxi company

Quartz india
Quartz india

Uber has finally given in to the demands of the Delhi government, and tweaked its vaunted business model.

The US-based cab service resumed its operations in Delhi today, a little over a month after it was banned by the state government, following the alleged rape of a 27-year-old woman by one of its drivers in December.

Uber is applying for a license to operate under a radio taxi scheme in the capital, after spending weeks trying to persuade the Delhi government that the normal rules of the taxi industry should not apply, because it is a technology company connecting riders and drivers.

A radio taxi company typically owns a fleet of cars, which can be pre-booked by a customer through a dispatcher. Uber, on the other hand, lists individual drivers and their vehicles on its app, which a customer can use to find an on-demand car.

An Uber spokesperson, in an emailed statement, told Quartz that it “is not a radio taxi company.”

“While we have applied for a license under the amended Radio Taxi scheme, Uber will remain a technology company and aggregator. The license would simply allow radio taxis to operate on our platform at our discretion, just like we enable in many other jurisdictions,” the spokesperson added.

In the wake of the December incident, the San Francisco-headquartered firm—now one of the most valuable startups in the world—had been pilloried for not doing enough to ensure passenger safety. In particular, its driver verification process was questioned. Now, as it returns to Delhi’s streets, Uber has new systems in place.

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.

The Delhi government had banned Uber and similar app-based taxi aggregators after the alleged rape on Dec. 5, 2014, and later ordered these firms to operate under India’s radio taxi rules (PDF).

Then, Delhi’s transport department amended its Radio Taxi Scheme to include so-called aggregators like Uber, but imposed certain conditions. These included:

  • maintaining an initial fleet of at least 50 taxis, either owned or through an agreement with licensed taxi drivers, and eventually at least 200 taxis
  • maintaining a 24-7 call center
  • installing taxi meters, GPS devices, and panic buttons in all cabs
  • making all of its cabs white

It’s unclear whether Uber will abide by all these rules right away. But what is clear is that the company’s disruptive business model has been disrupted in turn by Delhi regulators intent on maintaining their oversight of transportation in India’s capital city.

Uber has been facing regulatory and legal problems in other parts of the world, too. In December 2014, district attorneys of San Francisco and Los Angeles sued the company for allegedly misleading customers (PDF) on the quality of background checks it performs on its drivers.

In September 2014, a Berlin court had banned the company from operating in the German capital for not having enough safety checks in place, while cab drivers in Europe and Taiwan have raised concerns about Uber’s noncompliance with local laws.

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