Two-timing these 2-wheelers: Why Karnataka must take a quick U-turn on bike taxi bans

Economic Times

24-06-2025

Rapido, India's largest bike taxi operator is headquartered in a commercial hub where traffic stands still most days. But then, that is Bangalore for you. The richest live in an exclusive conclave that has the poorest infrastructure all around. They employ hundreds of techies who design apps that deliver everything from staples to smart phones in 10 minutes, yet waste hours of their productive lives in daily commute. And now, the single largest employer in India's thriving gig economy --- 2x larger than deliveries and 10x of e-commerce – faces a state-wide ban since last week.
Karnataka has banned bike taxi aggregators claiming private vehicles cannot indulge in commercial activities. The state's High Court in April and again this month, upheld the sarkari order declaring personal two-wheelers used for paid rides are illegal. These operators are plugging a crucial gap. Instead of punitive measures, the state must partner with them.
That would make them in sync with 12 other states and Union Territories that have already drafted clear policies based on the broad guidelines of the Motor Vehicles Act, 1988, that permits two wheelers to be contract carriages. Realising its potential, even the Centre since 2020, has been nudging states to lay down their ground rules. While Opposition ruled states like West Bengal have been the most progressive, offering on-tap licenses for its proliferation, others like Maharashtra have adapted a framework based on New Delhi's rulebook.
It's the state's job to provide infrastructure, transportation and public service deliveries. In Karnataka it has failed on all three. Bangalore is an urban quagmire. Even after a decade, the expansion of the Metro network has been abysmal. Taxpayers continue to bear the 53% cost escalation of just Phase II of Namma Metro. The delays have exacerbated traffic congestion in the city – 3rd most in the world as per Dutch location technology firm Tom Tom's 2024 Traffic Index -- as vehicular traffic have also galloped 56% in the same period.
Instead of further clogging the choked arteries of our city roads that operate on an average of 4x capacity, bike taxis leverage the existing infrastructure in 300 plus Indian cities to make travel affordable, accessible and convenient. 95% of our 200 million 2-wheelers ply the roads with a single user. Private operators like Ola, Rapido, Quick Ride, Jugnoo or Uber have stepped in to 'sweat' those bikes more efficiently in the world's largest two wheeler market.
It's a template borrowed from Asia and pockets of Africa and Latin America that have high population densities. In each of these markets, bike taxis have emerged as the primary choice of transport in metros and smaller centers. It's not just about absolute volumes. Often, they act as the crucial link between the first and last mile of public commute – the single biggest roadblock towards faster adoption of rapid urban transit systems. In cities like Chennai, Hyderabad, NCR or even Lucknow, metro adoptees hailing a bike taxi to start their journey from home to the nearest station or riding pillion once they come out of it to reach their final destinations has become the biggest use case. As Mumbai's metro roll out gathers steam, this trend will also play out in key junctions like Bandra Kurla Complex, where the station is in the middle of nowhere. In smaller cities, where options are even more limited and time bound, they are fast becoming the mainstay as work hours keep expanding while bus fleets aren't. Price wise, as the bridge between auto, taxis and buses, bike taxis have the perfect product market fit. Why else would 30-35% of a billion bike taxi rides from around the world originate from India?Being app first, these are safer (8 level checks from driver verification, route monitoring and even insurance covers) and more transparent than offline options. Women passengers find them far more safe as they are open and have enough emergency interventions. This alleviates the narrative of security. Karnataka can easily generate Rs 100 crores in GST revenues from fares. Add permit fees, aggregator license fees to the equation, the exchequer can earn a tidy sum.
In a state where a third of all posts in the administration are still vacant, bike taxis have managed to offer 6 lakh people their principal source of income every month. For many underemployed youths, it also acts as a supplementary means. A 2024 KPMG report 'Unlocking the potential of bike taxis in India,' suggests that most bike taxi drivers opt in to cover emergency expenses or run households. The move is especially baffling because of the policy inconsistency of the leadership that otherwise has been at the forefront of providing social security benefits to gig workers. Two-wheelers used for delivery services are allowed to operate freely under white number plates but those providing passenger transport using the same vehicles, operating under similar commercial intent are subjected to restrictions. Both are gig economy jobs, both involve commercial use of two-wheelers, and both are governed by the same Motor Vehicles Act.Much like neighboring Goa where vested interests of the local taxi mafia have created an inefficient and extortionist monopoly that has begun hurting its tourism-driven economy, in Karnataka too, local politicians and policy makers of the state, that fancies itself as the hub of innovation, are also sadly succumbing to rival motivations of auto-rickshaw unions that have even in the past had put a spoke in the wheels of progress. The state needs to decide if it wants to starve one vote bank to feed the other. Accordingly, it should immediately reverse their decision and accelerate a regulatory framework for business and innovation to thrive. Every single disruption faces turbulence as part of evolution. It's far more acute in the consumer internet fraternity as regulations are always playing catch up.But what's sauce for the goose should also be sauce for the gander.