Uber’s exit will have repercussions on economy, Karnataka High Court

Arguments in the taxi aggregators matter in the Karnataka High Court continued today, with Additional Advocate General AS Ponnanna making his submissions. The state is now justifying the constitutionality of the Karnataka On-demand Transportation Technology Rules of 2016 that has been challenged by Uber..At the outset, Raghavendra S Chauhan J. sought an explanation from Assistant Solicitor General for the High Court, Krishna Dixit. The judge asked for the opinion of the Centre on the basis for which the advisory of central transport ministry was issued..It was following this advisory, issued in October 2015, that the 2016 Rules were framed..During the course of the arguments, it was brought to light that a City Taxi Scheme introduced in 1998 was already operational for cabs plying in the state. Chauhan J. asked why the Rules apply to only some providers, while the Taxi Scheme applies to others. The judge sought an explanation of intelligible differentia lest the Rules fall afoul of Article 14 of the Constitution..In reply, the state argued that such a discrimination was unintentional and that app-based aggregators form a different class. To this, the judge said,.“All license holders under Section 74 of the Motor Vehicles form a homogenous class.”.Then came a provision-by-provision breakdown of the Rules. The judge questioned the logic behind Rule 6, which requires an aggregator to have a minimum fleet of one hundred taxis. It was put forth that this provision discriminates against startups who may want to start off with a smaller fleet in rural areas..“On one hand, you want to attract foreign investors, at the same time, you are not creating the conditions for them”, said Justice Chauhan..At this juncture, Senior Advocate Ravivarma Kumar, appearing for the Radio Taxi Association, pointed out that Uber was reported to have pulled out of China to the satisfaction of many people..To this Justice Chauhan replied,.“Do you want Uber to pull out of India? It will have repercussions on the economy.”.The judge went on to warn the state to think about the consequences of their policies. He cited the example of Roman emperor Tiberius, who put the man who discovered aluminium to death, after it was feared that the metal would cause a depreciation of gold and silver..Towards the end of the day, a few other provisions of the Rules were discussed. These included the rule which requires drivers to be residents of the state for at least two years and the requirement of special licence under Section 88(8) of the MV Act..Arguments will continue tomorrow..For a more detailed report on the matter, read our #Debriefed column.