Softbank-backed Ola has been banned from running operations in Bengaluru for the next six months following a notification from the Regional Transport Office (RTO) for violating license rules.
The company was running bike taxis in the city which was reportedly illegal given the lack of a policy framework. Ola confirmed the development, but claimed that it had halted operations of its bike taxis “weeks ago”.
“We have been closely working with the authorities on this topic, responding to queries and making proactive representations to the ministry. Despite other companies continuing to operate illegally, Ola halted our bike taxi experiment weeks ago, instead seeking the state’s cooperation to develop a legal framework for a pilot that will continue to take advantage of emerging opportunities in the mobility economy. This notification is unfortunate, and we look forward to an opportunity to address these concerns directly with state officials to find a solution for our driver-partners and millions of Ola users in Karnataka,” the company’s statement read.
“Ola is a law-abiding company that has always worked with the government to develop livelihoods, improve mobility, and enable a new technology industry. We are evaluating all options to find an amicable solution wherein hundreds of thousands of driver-partners in the state of Karnataka can continue to work and serve the mobility needs of our citizens,” it added.
The development takes place within days of the company announcing that it had raised $300 million in funds from South Korea’s Hyundai Motor Group in a strategic deal.
The company claims to have over 1.3 million driver partners across the country. Although it doesn’t give a city-wise breakup, Bengaluru is expected to be one of its top markets.
Founded in 2011 by Bhavish Aggarwal and Ankit Bhati, Ola integrates transportation for customers and cab drivers onto a mobile technology platform.