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Spectacle of Crackdown

Rapido, a leading bike taxi service in India, has gained prominence despite operating in a regulatory grey zone, previously avoiding scrutiny while competitors like Uber and Ola were targeted. The bike taxi market has grown globally, particularly in regions like Africa and Southeast Asia, but faced challenges in India due to regulatory ambiguity and lack of investment. Recent recommendations from the Ministry of Road Transport and Highways have provided some support for bike-sharing initiatives, yet many states have imposed bans on commercial use of two-wheelers for passenger transport.

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9 views2 pages

Spectacle of Crackdown

Rapido, a leading bike taxi service in India, has gained prominence despite operating in a regulatory grey zone, previously avoiding scrutiny while competitors like Uber and Ola were targeted. The bike taxi market has grown globally, particularly in regions like Africa and Southeast Asia, but faced challenges in India due to regulatory ambiguity and lack of investment. Recent recommendations from the Ministry of Road Transport and Highways have provided some support for bike-sharing initiatives, yet many states have imposed bans on commercial use of two-wheelers for passenger transport.

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This spectacle of crackdown is particularly problematic

for the bike taxi market leader, Rapido. For most of its
journey, Rapido has managed to stay out of radar
despite operating in a regulatory grey zone. There was
no Rapido-branded helmet, t-shirts, or bikes. Authorities
mostly targetted Uber and Ola bike taxis. As a founder of
a defunct bike taxi startup pointed out, “They didn’t know
Rapido existed.” But that is no longer the case. Rapido
has become a formidable mobility app comparable with
Uber and Ola. With its multiple offerings – car,
autorickshaw, and two-wheeler ride-hailing – and
unicorn status, Rapido attracts immediate attention.

Are bike taxis illegal?


As an affordable and easy mode of transport to navigate
congested cities, bike taxis have gained popularity
across Africa, Southeast Asia, and pockets of Latin
America. In Africa, they are a vital mode of last-mile
connectivity, though largely informal. Southeast Asia has
seen rapid digitisation of bike taxi services, with regional
consumer internet giants Gojek and Grab taking the
lead.

In India, bike taxi startups mushroomed when the


consumer internet economy flourished with a venture
capital wave in 2014-15. Despite that proliferation, bike
taxis didn’t excite venture capital investors. They largely
stayed away. The regulatory ambiguity and the presence
of Ola and Uber dissuaded them from investing in
standalone bike taxi startups. Eventually, all but one
perished.

One legal endorsement that offered some confidence


was the statutory order issued by the central government
on November 5, 2004. Under the Motor Vehicle Act, the
government classified a motorcycle used for hire to carry
one passenger on pillion as a ‘transport vehicle’. The
proponents of bike taxis pushed state governments to
create a framework aligned with the centre’s 2004
statutory order. However, many states failed to act on it
and instead imposed bans on the commercial use of
two-wheelers for passenger transport.

The use of private vehicles with white number plates as


taxis invited the wrath of transport authorities in many
states. Mobility firms such as Rapido, however, found a
way out. Since regulations did not explicitly prohibit
vehicle pooling on a cost-sharing basis, they positioned
their offerings as bike-pooling services instead of
commercial taxis.

Bike taxis got a shot in the arm when the Ministry of


Road Transport and Highways (MoRTH)’s committee
proposed taxi policy guidelines in December 2016
recommending states to promote bike-sharing.

“It is highly recommended that existing private bikes may


be allowed for such transportation in order to facilitate
utilisation of idle assets and state governments may also
consider online options to allow private bikes to convert
to taxis,” the committee wrote in its list of
recommendations.

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