Bumpy: Impact of Karnataka HC ban on bike taxis

What did the High Court rule?

The Karnataka High Court has mandated that shared mobility aggregators, including Rapido, Uber and Ola, cease operations of bike taxis in the state within six weeks due to the absence of specific state regulation around the service. The court has given three months to the state government to come up with rules for bike taxis, saying the transport department cannot register motorcycles as transport vehicles or issue permits for these services until the guidelines are established under the Motor Vehicles Act. Transport minister Ramalinga Reddy said he will review the order and develop guidelines.

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What’s the history of this controversy?

The issue has been going on for the last few years due to ambiguity over the legality of the service. Bike taxis emerged as a cheap mode of transport in 2016-2019, with Rapido, the largest player in the segment, introducing bike taxis in Bengaluru in 2015. The Karnataka Transport Department has repeatedly declared bike taxis illegal, citing the lack of a commercial permit category for two-wheelers. In 2021, Karnataka imposed restrictions, leading platforms to challenge the decision in court. The High Court then issued an interim order stopping the state from taking action against these services.

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Which are the companies getting impacted?

There are over 100,000 two-wheelers operating as taxis in Bengaluru. Rapido leads with a 60% market share, according to market estimates. The Bengaluru-based company said it facilitates over 5 million bike rides in Karnataka every month, providing over 150,000 people jobs. Ola and Uber, which are small players, will also face an impact or disruption in operations.

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How does it impact the common person?

A large number of commuters opt for bike taxis in Karnataka, particularly in Bengaluru, for daily commute. The move further burdens commuters in the city, already grappling with higher travel costs after Bengaluru Metro hiked fares by 50%, from ₹60 to ₹90. Additionally, the state government raised the Karnataka Sales Tax (KST) on diesel from 18.4% to 21.17%, effective 1 April, 2025, leading to a ₹2 per litre increase in diesel prices, pushing the retail price to ₹91.02 per litre across the state.

Have other states banned bike taxis?

Many states lack regulations for bike taxis leading them to operate in a grey area. Madras High Court banned Rapido in July 2019, but this was lifted the same year, allowing the company to resume services until the state framed new regulations. Rapido’s bike taxi services were banned in 2020 in Assam and in 2023 in Delhi. However, Maharashtra this week allowed e-bike taxis to operate in the state but the companies will have to have a minimum of 50 bikes and can take a ride for a maximum of 15km.