Ban only a warning to Ola, govt will sort things out: experts

Ever since the Karnataka government announced a ban on Ola for six months, there have been speculations about how long this ban can really last.

The company was quick to respond, saying it wants to sort out things with the state government and issued an official statement, claiming Ola is a law-abiding company that has always worked with the government to improve livelihoods, better mobility, and enable latest technologies. The statement further said the company is evaluating all options to find an amicable solution, which can ensure that hundreds of thousands of driver partners in the state can continue to work and serve the mobility needs of people.

The company has further made it clear in the statement that despite other companies continuing to operate illegally, Ola had halted bike taxi experiment weeks ago and is 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. The statement described the ban as 'unfortunate', and said it looks forward to an opportunity to address the concerns directly with state officials to find a solution.

Some of the experts with whom THE WEEK spoke are also hopeful that Ola will be successful in sorting out the issue with the state officials at the earliest. Experts feels that the notification has come as a warning for the company and it may have business implications on the aggregator which may lose out on business as long as the ban continues as Karnataka, particularly Bengaluru, is a major market for Ola. “I think this is a warning. A jolt of a warning. I think the govt is going to negotiate and things will be sorted out. However, such a notification means a zero tolerance attitude of the Karnataka government. Till the time the ban continues, it will have major business implications on Ola,” Harish Bijoor of Harish Bijoor Consults Inc, told THE WEEK.

Industry experts such as Nagesh Rajanna, CEO of India business at the Bengaluru based logistics company Sagisu, feels that the ban on Ola is unfortunate. “While there can be no exception to compliance of the law, this ban isn't only harsh on Ola but also puts the commuters at immense discomfort. A negotiation to avoid such ban could have been a better alternate, keeping in mind commuters' need,” Rajanna told THE WEEK.

Kris Lakshmikanth, founder and the CEO of the executive search firm Head Hunters Limited, is hopeful that the ban will be lifted soon as Ola is likely to get a stay from the High Court or may strike a deal with the Karnataka government. “It is not only the commuters who will suffer. It is also a case of livelihood of thousands of cab drivers who ply Ola cabs in Karnataka. They may protest the move. It is election time and the government may not do anything detrimental that may affect the livelihood of these cab drivers in the long run,” remarked Lakshmikanth.

Another expert, Alok Shende of Ascentius Consulting, Mumbai, feels that such a notification will serve as a deterrent for any large private player indulging in opportunistic adventurism. “Emerging players like Ola have now come to occupy important role as an urban utility in the Indian transportation sector. However, the regulatory experience for managing private utilities in the transportation sector is still nascent. The present case serves as an important milestone for establishing rule of law in the new economy sector,” Shende told THE WEEK.