The Union Ministry of Road Transport and Highways (MoRTH) issued an advisory clarifying that motorcycles fall within the definition of contract carriages as per Section 2(7) of the Motor Vehicles (MV) Act, 1988. This is an attempt to address the ongoing debate around the legality of bike taxis.

State of regulatory compliance

When it comes to bike taxi operations the issue of regulatory compliance across states in India has always been uncertain. Bicycle taxis are still illegal in Maharashtra and Delhi. However, it is permitted in Goa, Telangana, Rajasthan, and Uttar Pradesh.

MoRTH’s advisory comes as a welcome intervention for bike taxi operators like Rapido and Ola bikes as they have been struggling with regulatory uncertainties and licensing issues since their inception.

Industry growth

At large, the bike taxi industry in India stands to benefit significantly from the central government’s support as it offers those opportunities to expand their operations, enhance services, and contribute to the nation’s mobility ecosystem.

Connectivity and traffic congestion issues

MoRTH’s acceptance of bike taxis as a legal mode of public transport opens up a lot of potential avenues for solving first and last mile connectivity issues. Also for reducing traffic congestion, and increasing the range of affordable and accessible commute options for not just Tier 1, but Tier and Tier 3 cities.

Strengthing security and legitimacy for operators

This step taken by MoRTH towards legalising bike taxis will pave the way for Bike taxi captains’ professional growth and economic stability as they can now operate with a sense of security and legitimacy. It will also protect the bike taxi captains from being fined by authorities owing to licensing issues, which will contribute to a more sustainable and stable livelihood for these essential service providers.

Legal view

Abhishek Awasthi, Senior Partner at AZB and Partners, said, “MoRTH has issued this advisory clearing the regulatory dilemma. It is clear from the advisory that two wheelers are covered under the definition Motor Vehicles. The state governments should follow the advisory and register and issue contract carriage permits to two wheelers.”

Industry impact and market share

Rapido, with a 60% share in the bike taxi market, is the largest aggregator in India. Pavan Guntupalli, Co-founder of Rapido stated, “We sincerely appreciate the advisory issued by MoRTH on bike taxi regulation, as it provides much-needed clarity for the entire industry. We are hopeful that all states and UTs will start accepting and processing applications for granting permits to bike taxis. The streamlined regulations offer to widen the scope of impact that can be realised, especially in terms of traffic decongestion, employment generation, and sustainable transportation.”

He also added, “We are committed to identifying and addressing the critical commuting challenges that continue to persist across regions in India and are incredibly grateful to the government’s support in helping us on this journey of continuous learning and innovation.”