Centre issues advisory for State governments to legalise bike taxis

In an attempt to address the ongoing debate around the legality of bike taxis, the Union Ministry of Road Transport and Highways (MoRTH) issued an advisory on January 22, 2024.

The advisory clarifies that motorcycles fall within the definition of contract carriages as per Section 2(7) of the Motor Vehicles (MV) Act, 1988. 

The issue of regulatory compliance when it comes to bike taxi operations across states in India has always been uncertain. While Goa, Telangana, Rajasthan, and Uttar Pradesh have permitted them, they are banned in the states of Maharashtra and Delhi. MoRTH’s advisory comes as a welcome intervention for bike taxi operators like Rapido who have been struggling with regulatory uncertainties and licensing issues since their inception.

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

By recognising bike taxis as a legal mode of public transport, a cost-effective solution that has gained popularity, especially in the Tier 2 and Tier 3 cities of India over the last decade can now thrive without regulatory hurdles, noted the press release. 

This positive stance by MoRTH towards bike taxis opens up a lot of potential avenues for solving first and last mile connectivity issues, reducing traffic congestion, and increasing the range of affordable and accessible commute options for not just Tier 1, but Tier and Tier 3 cities.

The step taken by MoRTH towards legalising bike taxis will pave the way for their professional growth, economic stability, and further opportunities for employment generation. It will also protect the bike taxi captains from getting fined by authorities
owing to licensing issues, which will contribute to a more sustainable and stable livelihood form these essential service providers.

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 realized, especially in terms of traffic decongestion, employment generation, and sustainable transportation. 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.”

An independent senior lawyer and subject matter expert, Abhishek Awasthi, Senior Partner, 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." 

With a 60% share in the bike taxi market, Rapido is the largest bike taxi aggregator in India. Currently facilitating over 1 million+ bike taxi rides per day across India, Rapido has emerged as a massive employment generator, especially within the country’s gig workforce population.