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This article is written by Udisha Tyagi and the article is edited by Khushi Sharma (Trainee Associate, Blog iPleaders).

Abstract

This article talks about the amendment done in section 93 of the Motor Vehicle Act, 1988 by the Motor Vehicle Amendment Act, 2019. This amendment makes it compulsory for an aggregator to get a license from a competent authority before carrying out a business. This article discusses the meaning of aggregator as per the amended section and how this will affect the cab aggregator business. Businesses like ola and uber are conducting their businesses in India without a proper law regulating them, the Motor Vehicle Amendment Act is a huge step in this direction. 

This has dual importance, it will not let the aggregator exploit riders and will help aggregators to protect their interests. The central government, in order to properly enforce Section 93 of the motor vehicle amended act, 2019 has issued guidelines for cab aggregators to follow, this article discusses and breaks down these guidelines as to how they will affect aggregators and riders.

Introduction

With the increase in the use of technology and more accessible internet services, demand for online cab services is increasing. Due to the availability of high-speed internet and convenience associated with online cab services, consumers are opting for online cab services. More and more use of such cab aggregator services will lead to exploitation of customers if not regulated properly, amendment in section 93 of Motor Vehicle Act, 2000 was long overdue to include cab “aggregatorsalong with “agents” and “canvasser”. 

The Motor Vehicle (Amendment) Act,2019 has included the term “aggregator” along with “agent” and “canvasser”.According to section 93 of the Motor Vehicle Act, 1988, a person should not act as an agent or canvasser without obtaining a license from competent authority according to conditions laid by the state government. The term aggregator is defined in section 1A of the principal act as  “a digital intermediary or marketplace for a passenger to connect with a driver for the purpose of transportation”.

Recognition of cab aggregators as intermediaries

The motor vehicle amendment act, 2019 defines cab aggregators as digital intermediaries and makes cab aggregators like ola, uber, Meru to be governed by IT Act, 2000. Before this, no act was directly applicable to cab aggregators. Now, cab aggregators will have to comply with all provisions of the IT Act,2000. Now, the cab aggregators will have to pay a penalty under sec 72 for breach of confidentiality and privacy.

Cab aggregators and Section 72 of IT Act, 2000

According to Section 72 of the Information Technology Act, if a person has access to any electronic record, book, register, correspondence, information, document or other material, under this act, or rules and regulations made thereunder and publishes them without consent of the concerned person he shall be punished with imprisonment for a term which may extend to two years, or with fine which may extend to one lakh rupees, or with both.

This amendment will help to protect the customers’ right to privacy. There have been many instances where cab aggregators published users’ personal information without their consent. According to a report of The Indian Express, a Chennai-based customer claimed that Ola leaked personal details of customers including name, mobile number, address. According to him, Ola leaked the private information of 100 customers via SMS.

In 2017, Bengaluru’s CBI arrested a software engineer working in Ola for misusing aadhar data available on its website. He illegally developed a page using aadhar information of customers.

Motor Vehicle Aggregators Guidelines, 2020

Section 36 of the Motor Vehicle (Amendment) Act,2019 amends section 93 of the motor vehicle act, 1988. The amended provision provides that in order to issue a license to an aggregator, the state government should follow guidelines as laid down by the central government. In pursuant of this provision, the central government has laid down motor vehicle aggregators guidelines for issuing licenses to cab aggregators and for regulation of business done by these cab aggregators.

These guidelines provide conditions for becoming an aggregator, it is important to get a license from the state government to become an aggregator and these guidelines enumerate conditions to be complied with in order to get a license. It contains provisions for promoting electric vehicles and the vehicles running on bio-fuel. It lays down compliances with regard to drivers, vehicles and ensures their safety. It also focuses on the efficient use of fuel by formulating guidelines for carpooling. It promotes the usage of public transport. For the convenience of riders, guidelines for the regulation of fares have been laid down. In what conditions the license will be suspended or cancelled. 

Eligibility of an aggregator

  1. The applicant must be a:
  • Company registered under companies act 1988 or 2013; or
  • A cooperative society under the cooperative societies act, 1912 was formed by association of drivers or motor vehicle owners or any such other organization; or
  • Or limited liability partnership under Limited Liability Partnership Act, 2008.
  1. There should be a registered office of the applicant in India.
  2. The applicant must follow all the provisions laid down under this act, the IT act,  2000   (including the intermediary guidelines).
  3. The applicant should not pose as an aggregator or hire any driver unless he has obtained the license from the state government.

Licensing requirements

The driver of such a vehicle should pass a driving test and should attend an induction training session. This induction session is 5 days, 30 hours session for making the driver understand the efficient use of the app, understand the provisions of the motor vehicle act, on-road safety, careful driving, vehicle’s maintenance, maintaining proper health and hygiene, efficient use of fuel, getting to know the routes where the driver will be operating, the terms of the contract between the aggregator and the driver and gender sensitization. It is the duty of the aggregator to make sure that the driver attends the induction session if he has been hired before the implementation of these guidelines. 

The cab aggregator should start business 6 months from the date of issuing of such license, if not so then the license will be cancelled.

Guidelines issued by the government of India, WHO, or any concerned authority regarding any pandemic should be complied with by the aggregators.

Compliances regarding vehicles

The vehicle should be registered, valid permit for commercial vehicles, valid fitness certificate, valid third party insurance, valid pollution under control certificate, compliance with emission norms and city-specific fuel norms, updated payment of taxes, and e-challans. The driver should carry digital copies of all these documents with him. There should be a child lock, fire extinguisher, and a “TAXI” sign on the vehicle.

Regarding app and website

The app should be available in both Hindi and English, and in states where the official language is not Hindi, it should be available in one more language. The safety of the app should be checked and certified by a recognized cybersecurity firm. The information in the app should be stored in a server in India for a period of a minimum of 3 months and a maximum of 24 months. No data should be shared without the consent of the customer. The facility of sharing the live location of the rider. A picture of the driver should be available on the app. Availability of all information on website and app regarding the vehicle. Stringent rules against the use of drugs by drivers, timely and effective redressal of riders’ grievances.

For the security of riders

There should be a proper GPS system in the vehicle for navigation, the driver should follow the route assigned on the app, there should be a proper grievance redressal mechanism for protecting the rights and interests of female drivers, and regular checking of vehicles by such aggregator.

For regulation of fares

The base fare charged to the riders should be the taxi fare fixed by WPI for that particular year, the aggregator is allowed to charge its customer 50% below the base fare, the driver of such vehicle should be given 80% of the total fare of the ride, in states where base fare has not been fixed by the state government it should be Rs. 25/30. 

Regarding cancellation of rides

If the driver cancels the ride without any valid reason, after accepting it, then such driver will be penalized 10% of the total fare not exceeding Rs. 100.

If the rider cancels the ride without any valid reason then such rider will be penalized 10% of the total fare not exceeding Rs. 100.

For ride pooling

Aggregators can provide car pooling facilities for riders travelling on same route if their KYC and details are available, female riders should be given option of ride pooling with female passengers, 

Conclusion

As per the Motor Vehicle Amendment Act, 2019 now section 93 of the Motor Vehicle Act included “aggregators” along with “agents” and “canvassers”. Now, these cab aggregators will require licenses to function, these aggregators are given a proper definition. They are defined as digital intermediaries, hence, they will have to comply with the provisions of the Information Technology Act, 2000 and guidelines issued under it. Section 72 will be applicable to the cab aggregators like Ola and Uber, now they will be penalized for a breach of confidentiality and privacy. This is in the interest of riders as recently a lot of cases of  data leak were reported. In order to apply section 93 effectively, the central government has laid guidelines for such cab aggregators called “Motor Vehicle Aggregator Guidelines 2020”. They direct cab aggregators and drivers of such vehicles to comply with these guidelines.


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