Ola, Uber, Rapido hit roadblock as HC upholds Karnataka bike taxi ban

With over Rs 700 crore disbursed to riders and 6 lakh livelihoods hanging in the balance, mobility brands uge Karnataka to act swiftly and formulate a clear, inclusive regulatory framework

by e4m Staff
Published: Jun 14, 2025 12:45 PM | 3 min read

In a blow to bike taxi aggregators, the Karnataka High Court on Friday declined to stay a previous order suspending bike taxi services across the state. The division bench, comprising Acting Chief Justice Kameswar Rao and Justice Sreenivas Harish Kumar, instructed the petitioners - Ola and Uber and the transport department to submit their arguments on merit by 20 June. The matter is scheduled for the next hearing on 24 June.

Until then, the 2 April order by Justice Shyam Prasad, which halted bike taxi operations, will remain in force, as the bench denied interim relief to the aggregators.

Justice Rao noted that interim relief could have been granted to the aggregators if the state government had shown intent to formulate a bike taxi policy. “However, in this case, the state government has clearly made a policy decision (of not being interested in framing a bike taxi policy),” he observed.

Aggregators had moved the Karnataka High Court's division bench seeking a stay on the 2 April single-judge order that suspended bike taxi operations in the state. This appeal followed an earlier decision by the court to grant a four-week extension from 14 May, modifying the original order. The new deadline for suspension now expires on 15 June (Sunday).

The petitioners argued that in the absence of state-specific rules, the central government’s guidelines under the Motor Vehicles Act should be applicable. The state government, however, countered this claim, stating that the Centre’s guidelines are only persuasive and not legally binding unless formally adopted by the state.

The lack of interim relief is expected to significantly impact the operations of aggregators like Rapido, Ola and Uber. The 2 April order mandates that all bike taxi services be suspended until the state frames specific rules under Section 93 of the Motor Vehicles Act.

Rapido, in its submissions, emphasised that an outright ban without regulatory clarity could affect the livelihoods of over 6 lakh individuals across Karnataka. The company highlighted that it has disbursed over Rs 700 crore to its captains and paid more than Rs 100 crore in GST across various service categories in Bengaluru in recent years.

Rapido also stated that more than 75 per cent of its riders rely on the platform as their primary source of income, earning an average of Rs 35,000 per month. It further argued that the use of two-wheelers as contract carriages has been legal since the inception of the Motor Vehicles Act, 1988, and that the Centre had reaffirmed this position through a formal advisory.

Meanwhile, industry body Nasscom has made a formal representation to Karnataka Transport Minister Ramalinga Reddy, urging swift action to resolve the impasse. Nasscom underscored Karnataka’s role as a leader in tech-driven innovation and highlighted how app-based bike taxis play a crucial role in supporting employment, enhancing last-mile connectivity, and reducing urban traffic congestion.

Nasscom stated, “The ecosystem not only offers affordable and efficient mobility but also sustains lakhs of gig workers across the state, including students, women, migrants from other parts of Karnataka, and those recovering from the post-pandemic economic crisis,”

In its submission, Nasscom has called on the Karnataka government to extend the 15 June deadline, seeking interim relief to “prevent large-scale livelihood disruption.” It also urged the state to begin a consultative process aimed at formulating a balanced regulatory framework for a long-term resolution.