Uber and Ola may soon have a new competitor: the government of India

Heading to court.
Heading to court.
Image: EPA/Jagadeesh NV
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The Indian government could soon become a player in the $10 billion ride-hailing market, launching its own taxi-booking app, the country’s minister for transport said on July 24.

According to the plan, the app will allow commuters to choose any mode of travel—from electric four-wheelers to two-wheeler taxis—from myriad service providers. “The government platform will help get more people employment opportunities,” Nitin Gadkari, India’s minister for roads and transport, was reported as saying by the Economic Times newspaper. “The idea is in the primary stage but we’re working on it seriously.”

If rolled out, the government’s ride-hailing app will compete in a market dominated by San Francisco-based Uber and Bengaluru-based Ola. “Why should two companies like Uber and Ola have a monopoly in the market?” Gadkari said. “We want people, even those running cab business at a small scale, to have an equal opportunity to provide service to people. The mobile app will provide a platform to such people and better, efficient and cheaper cab services to people.”

This revelation comes at a time when the Indian government is trying to bring clarity on the rules for cab aggregators. A new law under consideration seeks to bring taxi aggregators under the Motor Vehicles Act. Following this, various state governments must follow the guidelines fixed by the transport ministry while issuing licences to such companies. States will be free to further add additional rules since transport is a state subject.

For the past three years, the Modi government has been trying to set these rules, particularly since the rape of a passenger by an Uber driver in December 2014. Soon after that incident, India’s home ministry advised all states to ban taxi aggregators. Since then, a lack of clarity on the laws has left taxi aggregators confused on various matters.

Meanwhile, this isn’t the first time that a government has tried its hand at a ride-sharing app. In December 2015, the Delhi government launched the PoochO driver app, through which customers could book taxi and auto-rickshaw services in India’s capital. Disgruntled drivers of the cab aggregators, too, have been taking on Uber and Ola by launching their own platforms. In Karnataka, former Uber and Ola drivers sought the backing of the state’s ex-chief minister HD Kumaraswamy, who went on to launch HDK Cabs. In New Delhi, drivers launched their own taxi-hailing app called SEWA in April. Last month, Mumbai’s khaki-uniformed local cab drivers launched the Aamchi Driver (our driver) app.