In a move that’s stirred debates across commuters, courts, and gig workers alike, Karnataka has officially shut down bike taxi operations. While users bemoan the loss of affordable last-mile transport, and gig workers scramble to find alternative income, the real conflict lies not just in livelihoods or logistics it’s a legal tussle rooted in the Motor Vehicles Act, 1988.
What Does the Motor Vehicles Act Say?
The Motor Vehicles Act, 1988 (MV Act) is the foundational law governing transportation across India. It clearly distinguishes between private and commercial vehicles, and regulates licensing, registration, and usage based on the vehicle’s category.
Here’s the key issue: Bike taxis operate using white-board (private) vehicles, while commercial passenger transport requires yellow-board registration under the Act. Section 66 of the MV Act states that no motor vehicle shall be used as a transport vehicle without a permit from the Regional Transport Authority.
Hence, when bike taxi services like Rapido, Uber Moto, and Ola Bikes use private bikes for ferrying passengers without commercial permits, they are in direct violation of Section 66 and Section 192A (which lays penalties for unauthorized use).
Court’s Take: Legality First, Innovation Later
In June 2025, the Karnataka High Court upheld an earlier directive banning bike taxis until a legal regulatory framework is enacted under the Motor Vehicles Act.
The court observed:
“Permitting the use of white-board bikes for commercial purposes without a valid transport permit is a statutory violation under the Motor Vehicles Act and cannot be allowed to continue unchecked.”
This ruling reinforced the Transport Department’s stance that aggregators must comply with the MV Act or suspend operations. Even earlier efforts like the 2021 Karnataka Electric Bike Taxi Scheme were revoked in 2024, with the state citing unlawful exploitation of the scheme and “improper alignment with central legislation.”
Safety, Regulation, and Loopholes
The state argued that the lack of permits also compromises passenger safety:
- Private bikes are not subject to fitness tests, insurance norms, or driver verification required for commercial transport.
- In case of accidents or crimes, it becomes difficult to trace or regulate liability due to inadequate compliance with MV Act mandates.
Hence, the legal vacuum created a situation where neither safety nor legality could be assured, leading to a shutdown.
The Industry Pushback
Industry bodies like NASSCOM and digital rights organizations have argued that the MV Act is outdated for modern mobility services, and needs urgent reforms to accommodate app-based platforms. A NASSCOM spokesperson said: “Instead of blanket bans, the government should amend the Act or draft state-level rules to accommodate shared mobility innovations like bike taxis.” But until those amendments or state-specific policies come, any such operations remain illegal under existing national law.
What Needs to Happen Now?
To resume operations lawfully, the State Government must notify rules under Section 67 of the MV Act which allows states to make regulations for aggregators, fares, permits, and safety norms. In the recent judgment, the High Court gave the government three months to frame appropriate rules. If done correctly, this could allow:
- Issue of yellow-board permits to bike taxi operators.
- Setting standards for driver training, vehicle fitness, and insurance compliance.
- Creating an aggregator licensing framework (as seen in states like Telangana or Maharashtra).
Final Thoughts: Law Before Speed
While the convenience of bike taxis can’t be denied, law must always keep pace with innovation. The Karnataka ban reflects not a resistance to progress, but a call for compliance and safety rooted in law particularly the Motor Vehicles Act that forms the backbone of India’s transport regulation.Until a harmonious legal framework is crafted, bike taxis in Karnataka remain legally off-road.
Sources:
- https://m.economictimes.com/tech/technology/karnataka-hc-refuses-relief-to-bike-aggregators-nasscom-warns-state-govt-of-huge-job-losses/articleshow/121834509.cms
- https://timesofindia.indiatimes.com/city/bengaluru/karnataka-government-stop-bike-taxi-operations-or-face-action/articleshow/121867486.cms
- https://www.indiacode.nic.in/bitstream/123456789/9460/1/a1988-59.pdf – Motor Vehicle Act – Bare Act
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