The 2016 amendment bill to the Motor vehicles Act seeks to bring taxi aggregators under the purview of the Act. As per the bill, an “aggregator” refers to a digital intermediary or market place for a passenger to connect with a driver for the purpose of transportation. It is quite evident that this alludes to mobile based taxi aggregator applications like UBER and OLA.

It is the general perception that such a move is aimed towards ending the prevalence of “surge pricing” model that is in place now. In respect thereto, it has been reiterated by taxi aggregators like UBER that their services cannot fall under the purview of such regulations.

The implementation of such provisions will have tangible changes regarding the way such aggregators operate, and on the drivers as well. Firstly, such aggregators will have to adhere to the provisions of the Information Technology Act, 2000. Secondly, the bill also proposes the imposition of stiff fines – As per the proposed amendments to the provisions of section 193, “Whoever engages himself as an aggregator in contravention of the provisions of section 93 or of any rules made thereunder shall be punishable with fine up to one lakh rupees but shall not be less than twenty-five thousand rupees.”

Clause 75 of the amendment bill seeks to amend section 193 of the Act in order to enhance the penalties for agents and canvassers and provide for penalties for aggregators for contravening the provisions of this Act and the conditions of license.

While this Bill may be a hefty regulatory move for taxi services that employ the service of online booking, it will provide relief to customers who use these services on a daily basis and make the aggregator services more accountable because of the increase of surge pricing that causes inconvenience to these customers.