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[Surge Pricing & Ride Cancellations] Uber’s Request for Suspension of Rules Governing Cab Aggregators Denied by Calcutta HC

3 min read

Prerna Gala

Published on: September 22, 2022 at 17:45 IST

In the case of Uber India Systems Private Limited vs. State of West Bengal, the Calcutta High Court declined to stay the rules announced by the West Bengal government to control the activities of cab aggregators like Uber and Ola.

The single-judge Justice Sabyasachi Bhattacharyya determined that the requirements for offering refresher programmes for drivers are not impracticable after taking into account pricing increases by taxi aggregators and driver cancellations.

“The guidelines are entirely for the benefit and safety of the consumers of the aggregators. Procedures like Refresher Training Programmes, Remedial Training of Drivers, Surge Pricing issues, Safety and Driver Compliances, non-discrimination, etc., are entirely necessary, particularly in the context of recent instances of untoward incidents of harassment of passengers at the behest of drivers affiliated to the aggregators,” the Court ruled.

The State government’s notification of the rules was being challenged by Uber India on the grounds that the State had not followed the proper procedure while it was being heard by the bench.

It claimed that a number of the guidelines’ clauses are unfairly harsh, oppressive, burdensome, and discriminatory.

According to the new regulations, the aggregators emphasised that the drivers would have to go through a number of additional difficult examinations, training programmes, and fulfil a number of other requirements that ordinary cab drivers providing the same service would not have to go through.

The guidelines, it was argued, are inapplicable because they require aggregators to share sensitive information with other aggregators and upload sensitive algorithms to their websites, as well as put the burden of ensuring that all pending vehicle-related cases are resolved within two months on them.

Furthermore, it was claimed that by issuing a draught notification and inviting comments and ideas, the State had violated the legal procedure.

The State, on the other hand, defended the rules, pointing out that other aggregators like Ola Cabs have already begun applying for licenses (within the rules) and that many of these provisional licenses have already been awarded to their drivers, demonstrating that the rules are practical.

The bench concluded, after reviewing the evidence, that the State had adhered to the proper procedure and consulted all relevant parties.

“In fact, Uber did not initially challenge the veracity or legality of the notification when it sought clarification for the purpose of complying with the guidelines stipulated therein. The arguments as regards the guidelines being unworkable do not, ipso facto, render them invalid or vitiated in law,” the Court observed.

Furthermore, the Court stated that minor departures from the Central government guidelines do not significantly impede the aggregators’ ability to function.

The guidelines, according to the Court, substantially follow those guidelines.

The court also stated that it was important for the applicable rules to avoid forming an impractical code of conduct that would make it difficult for Uber cabs to operate.

Further the bench added, “Hence, on a prima facie consideration of the available materials and the relevant legal provisions, I find no discrepancy or illegality whatsoever in the issuance of the impugned guidelines by way of the notification dated March 3, 2022 and subsequently published in the Official Gazette on June 15, 2022,”