23/01/2015 6:53 PM IST | Updated 15/07/2016 8:24 AM IST

Uber Is Back On Delhi Streets, Transport Dept Says Will Impound Cars

QUIQUE GARCIA via Getty Images
Cabs wait in line on the Paseo de Gracia in Barcelona, on December 9, 2014. A judge on December 9, 2014 banned the popular smartphone taxi service Uber from operating in Spain, court officials said, following similar prohibition action in several other countries. AFP PHOTO/ QUIQUE GARCIA (Photo credit should read QUIQUE GARCIA/AFP/Getty Images)

After more than a month of being off the roads in the National Capital following a ban by the Delhi Transport Department, cab-hailing app Uber has restarted operations in the city. But it appears to have done so even as the transport department has not said anything about lifting the ban. Besides, Uber does not yet possess a radio taxi license under the new guidelines issued by the Delhi government last month.

None of this has deterred the San Francisco-headquartered technology firm, which announced its re-entry in a blog post.

A senior Delhi transport department official told HuffPost India that Uber is not permitted to operate and the administration might move to impound vehicles. "We are aware that Uber has started operations without a license. We will soon start taking action, by impounding vehicles. We did the same against Ola cabs, but the service is still continuing," said the official, who asked not to be named because he is not authorized to speak to the media while the model code of conduct is in force ahead of assembly elections in Delhi.

Indian taxi apps such as Ola and TaxiforSure have also been operating in Delhi in recent weeks although Delhi administration has made it clear that only companies with a license to operate radio taxis are permitted. We had reported the long and onerous set of conditions set by the government, which now permits web or app-based aggregators but expects them to operate like a fleet-owning business, with a centralised call centre, dedicated parking space for the entire fleet, a company registered in Delhi with permission to operate a cab business, a physical GPS unit that meets specified technical requirements, a physical panic button, and so on.

But Uber, the world's hottest tech startup valued at $40 billion, has an Indian subsidiary registered in Maharashtra. But that company, Uber India Systems Private Limited, is registered as a tech company and its Articles of Association--the incorporation document that details the areas of business a company is permitted to pursue under Indian law--does not even contain the words 'taxi' or 'cab'. It is incorporated as a technology company. And therefore it doesn't meet even the first criteria prescribed by the Delhi government.

But Uber has decided for itself that it has taken enough measures to get back on Delhi streets. "After weeks of conversations with our rider and driver communities, we know they eagerly want Uber back on the roads. Our driver-partners’ livelihoods are being severely impacted, and our riders are left without the platform they have come to rely upon for their daily needs. That is why, today, we resume operations in Delhi, but only allowing driver-partners who have undergone re-verification of their Police clearance in the last six weeks to get back on the platform," an Uber spokesperson said.

In a blog post, the company said that it has developed new safety features -- including an in-app emergency button -- and established a dedicated incident-response team.

Uber was banned by the Delhi government after a woman was raped in an Uber cab by the driver. The union home ministry had subsequently issued an advisory to all states saying app-based aggregators such as Uber must be regulated. Different cities have treated the issue differently. Kolkata, notably, has allowed companies such as Uber and Ola to operate a taxi aggregation business under the information technology law.

Subsequently, the Delhi government modified the 2006 Radio Taxi Scheme to include app-based aggregators, who had been operating outside the purview of any regulation. But the government rules didn't exactly facilitate the new web-based business model and practically required them to become like Meru or Easycabs, which own cabs and employs drivers.

That meant that cab apps such as Uber and Ola would need to adhere to long and onerous set of rules. For instance, every car must be fitted with a GPRS/GPS-based tracking system with a printer unit and a panic button that will alert the control room or a nearest police station. The unit must transmit back to a central control room the real time location of the cab. And these are just a few of the rules. Following them will kill the competitive advantage in the lean business model that global investors love putting their money behind.

TaxiForSure applied for a license in Delhi two weeks back. Ola has not applied yet. The Indian taxi market is estimated to be worth about $9 billion (Rs 54,000 crore) of which only 4-6% is organised.

For Uber, which was valued at $40 billion last month, controversies are not new. It has faced opposition from cab drivers associations and governments in various locations around the world.