By Archit Gupta, National Law Institute University, Bhopal.

A woman was allegedly raped by the driver of a cab she had booked using the app based tax service, Uber[i]in Delhi. Uber is one of those smart app radio taxi services which have given new way of traveling for Indian women. These services are generally considered to be safe because of verification and GPS, but Delhi case has proved everyone wrong. In India, it was first introduced in Bangalore and has expanded to 10 Indian cities[ii].

Uber issued a statement after the incident and offered all support to the police in their investigation.[iii] The statement also said that driver verification is thoroughly conducted in order to provide a safe transport option. However, it must be kept in mind that issues with Uber are not being faced in India but in other jurisdictions also.[iv] Uber has been banned in Brussels on the ground that it partners with taxi drivers who do not have a license or the required permission to use their private vehicles for earning money from passengers.[v]

It is alleged that smart app based taxi services like Ola and Uber have bending violating rules and regulations to become operational in India. After the rape incident, the Government banned the services of Uber in Delhi reasoning that Uber is running taxis that cannot ply in Delhi.[vi] This means that traffic police can impound or fine these vehicles. This incident also highlights that Uber didn’t have a rent- a cab permit and didn’t verified the criminal history of its drivers while registering them. The driver was charged with the similar offense earlier although he was acquitted.[vii]

State governments, in the exercise of their powers to frame rules for the effective administration of the Motor Vehicles Act, have put in place radio taxi schemes for the functioning of radio taxis. The Radio Taxi Scheme of 2006 is the nodal regulation for operation of such taxi services in Delhi. The scheme specifies that the licensee must be either a Company under Companies Act, 1956 or a Society under the Societies Registration Act, 1860. The key requirements of the scheme are as follows:

  1. Spacious Control Room
  2. Radio Communications
  3. Adequate parking space for all taxies and office space
  4. Minimum fleet size would be 500 motor cabs[viii]
  5. Every vehicle must be fitted with GPS based tracking devices
  6. It would be the responsibility of companies to ensure police verification of their drivers

The model used by Uber depends on technology to make cabs more easily available to passengers. Uber provides information and means to obtain services offered by transport owners, drivers or transport operators.[ix] Such services are requested through Uber smart app based application. As per the terms and conditions mentioned on Uber website, the quality of the transportation services requested through Uber is entirely the responsibility of the vehicle operator or provider. The website also states that any complaint about the driver should be given to the transportation provider. Uber only acts as a link between the vehicle provider and customer.

The drivers are not the employees of Uber. They are independent contractors but Uber exercises some control over their drivers. Although Uber runs a background check on its drivers, it is limited to police verification. The recent rape case has shown the loopholes in this process as previous criminal record of the driver was ignored. In other jurisdictions such as United States of America, there is multi-layer screening process which includes checking at federal, state and county levels. The previous driving record of driver is kept in mind and he is regularly monitored to ensure safe driving.

However, there is a difference between regulations for radio taxi operators and intermediaries like Ola and Uber. In order to work for a radio company, a driver has to go through the long process of becoming a certified badge holder. Once a radio taxi driver has a commercial license, he has to undergo police verification which takes into account permanent address, criminal records, etc. Once the verification process is completed, the transport department issues a badge with unique identification number. The drivers who work with intermediaries are not affected by this stringent process and they merely have commercial license.

In Uber model, the taxi users as well as taxi operators need to get themselves registered on Uber in order to access its services. While registering, customers are required to provide their name, address and contact numbers which are stored by the company. After registering, customers can use Uber’s GPS facility to find out of there are any taxis in their area. Thereafter, the app informs the user about the estimated price of the journey and the expected time of arrival of the taxi along with details of the driver such as his/her name, photo and contact number. The app automatically charges the customer through credit card and pockets 20 % of the fare amount.[x]

The following legal issues have emerged for the Uber incident:

  1. The Motor Vehicles Act, 1988 doesn’t specify liabilities or rights of taxi intermediaries. There is an urgent need to modify this Act in order to incorporate new form of transport providers. Uber has not set up any legal entity in India. As a result, it is very difficult for any regulator to hold Uber accountable for its actions.
  2. Although Uber has verification and a rating process for its drivers, they have failed to serve the purpose of ensuring safety for customers. The process is outdated and one can easily bypass this process.
  3. Since the Uber collects personal data of the customers there is a concern of data security. The law that deals with data privacy is Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011.
  4. The transactions are done by credit card and there is a threat of fraud in such transactions. The RBI has put in place a 2 step-authentication system a few years ago. Under this system, the user is not only required to enter his credit card i.e. the card number, expiry date and CVV number, but is also expected to enter the one-time password in order to complete second step. However, in the case of Uber, the second step is not fulfilled as the payment is automatically collected by Uber when a customer reaches his destination. The RBI has said that the companies do not follow the second step in the authentication process are flouting guidelines on card security. Only those companies whose payment gateways are not in India can circumvent the 2-step requirement. For example, a person does not need to enter a one-time password while shopping on amazon.com, even though the OTP has to be entered while shopping on amazon.in.[xi] Although Uber’s payment gateways are not located in India because all the payments are processed by its operating firm called Uber BV located in the Netherlands, it still has to comply with the 2-factor authentication process because 80% of every payment that it receives has to be funneled back into India in favor of taxi operators.[xii]
  5. The notification — No. U-11036/(i)UTL dated 09.09.2010 of the Union Home Ministry — declared several guidelines for vehicles carrying female employees of Business Process Outsourcing (BPO) companies and corporate houses, including equipping their vehicles with GPS (Global Positioning Systems) in two months. However, the notification is silent on its application to similar vehicles not directly employed by such business entities, such as privately-owned cabs.[xiii]

After the unfortunate rape incident, the Union Home Ministry issued guidelines to stop all app-based services. The state governments of Delhi, Uttar Pradesh and Chandigarh banned these services and other states have issued show cause notice.[xiv] The transport official has said that the Uber didn’t have a city-specific license to operate in Delhi and has misled the customer about the nature of services.[xv] Under the public pressure the Delhi Police has registered a case of cheating under Section 420 of IPC and is planning to file further charges against the company.[xvi]

The knee-jerk reaction on the part of the government won’t help the matter. By merely banning taxi services and issuing guidelines, the passengers especially women won’t feel safe. The government needs to overhaul the process by which license and permit are issued to drivers of these commercial vehicles. It is well-known that one can get commercial license by simply greasing the palm of few officials. If one can get away for such a small thing, he might be encouraged to commit bigger crimes. Take infamous 16 December rape case for example. The school bus was being run late at night and no policeman bothered to stop it. When they were informed that such bus was running, they choose to ignore it before it was too late.[xvii] Clearly, there is collusion between vehicle operators, police officials and transport officers which allowed these drivers to go unabated. This situation is further aggravated in cities like Delhi and Mumbai where private as well as commercial vehicles are increasing every year, but there is not adequate mechanism to check them.

This event has also provided an opportunity for law makers to regulate the intermediaries and form a comprehensive regulation which ensures safety of passengers. A failure to revamp existing frameworks to promote entrepreneur based growth would not only have several deleterious effects on the economy. The new motor bill which is still being drafted should contain the provisos to rein in reckless taxi operators and services. It should also contain hefty fine for vehicle operators who hire drivers without proper verification.

However, it is not merely the liability of government to ensure safe working of women. We, as citizens of this country, have a duty to stand up against the injustice. By merely expressing our anger and participating in candle marches, we are not acting like model citizens, but rather hiding from our true responsibility.

[i] Uber rape, http://www.thehindu.com/news/national/delhi-uber-cab-rape-case/article6675680.ece (last visited Dec 31, 2014)

[ii] Uber launches low-cost cab service for India – The Times of India, http://timesofindia.indiatimes.com/business/india-business/Uber-launches-low-cost-cab-service-for-India/articleshow/45211847.cms (last visited Dec 31, 2014)

[iii] Delhi Live: We are sorry, says Uber in a statement on the rape case, http://www.firstpost.com/india/delhi-live-we-are-sorry-says-uber-in-a-statement-on-the-rape-case-1838045.html (last visited Dec 31, 2014)

[iv] Prosecutors not charging limo driver D.C. police accused in rape, http://www.washingtonpost.com/local/uber-driver-charged-with-raping-woman-in-dc/2013/03/14/2bbf4c8e-8cb0-11e2-9838-d62f083ba93f_story.html (last visited Dec 31, 2014)

[v] Berlin follows Brussels with Uber ban, http://www.cityam.com/blog/1397747996/berlin-follows-brussels-uber-ban (last visited Dec 31, 2014)

[vi] Uber case highlights need for new laws for e-commerce firms, http://www.livemint.com/Companies/ZNXRAanZVwQ49rEDRthqUL/Uber-case-highlights-need-for-new-laws-for-ecommerce-firms.html (last visited Dec 31, 2014)

[vii] Delhi Police file FIR against Uber for alleged cheating, http://www.thehindu.com/news/national/delhi-police-file-fir-against-uber-for-alleged-cheating/article6673688.ece?ref=relatedNews (last visited Dec 31, 2014)

[viii] Delhi govt. formulates new rules for radio taxis following Uber rape case, http://www.abplive.in/crime/2014/12/29/article464613.ece/Delhi-govt.-formulates-new-rules-for-radio-taxis-following-Uber-rape-case (last visited Dec 31, 2014)

[ix] Uber, https://www.uber.com/legal/ind/terms (last visited Dec 31, 2014)

[x] Ibid

[xi] http://blog.ipleaders.in/is-uber-legal-in-india/ (last visited Dec 31, 2014)

[xii] Ibid

[xiii] Uber rape case: It’s a free-for-all in private taxi sector The Hindu, http://www.thehindu.com/news/national/uber-rape-case-its-a-freeforall-in-private-taxi-sector/article6674281.ece (last visited Dec 31, 2014)

[xiv] Uber case: Changes in law to accommodate online taxi services as it employs thousands, http://articles.economictimes.indiatimes.com/2014-12-13/news/57012268_1_narendra-modi-government-aggregators-uber (last visited Dec 31, 2014

[xv] Uber case highlights need for new laws for e-commerce firms, http://www.livemint.com/Companies/ZNXRAanZVwQ49rEDRthqUL/Uber-case-highlights-need-for-new-laws-for-ecommerce-firms.html (last visited Dec 31, 2014)

[xvi] Delhi Police file FIR against Uber for alleged cheating, http://www.thehindu.com/news/national/delhi-police-file-fir-against-uber-for-alleged-cheating/article6673688.ece?ref=relatedNews (last visited Dec 31, 2014)

[xvii] Delhi gang-rape: victim narrates the tale of horror The Hindu, http://www.thehindu.com/news/national/delhi-gangrape-victim-narrates-the-tale-of-horror/article4230038.ece (last visited Dec 31, 2014)

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