The Punjab government’s decision to review the ban imposed on two ride-hailing companies, Uber and Careem, would certainly appease many who were taken aback by the earlier notification. The two firms found themselves under heavy fire on Tuesday when the administration declared them to be operating outside the local regulatory bounds. Their failure to acquire the necessary fitness and safety certifications along with perverse tax avoidance were also raised as serious violations of the city’s laws in the notification, which called for a prompt legal action against these services.
While this legislation does hold significant ground in the light of “great losses (incurred) to the government’, as has been widely reported, the authorities would have benefitted more by reasonable regulations and a tax policy that caters to such unique business models. With an increasing reliance of nearly all strata of the society upon these services for transportation, companies like Uber and Careem are fast gaining prevalence as household names. The company is obviously answering a significant public need. Connecting the users with their rides as conveniently as a tap on the mobile screen; hiring a cab is now easier than ever. High safety and low cost of the ride are some other key features that have considerably helped widen the popularity base of these app-based services in such a short period of time.
It is up to the authorities to craft a policy that not only suits the economic needs of the country but also continues to facilitate the public. Whether the government treats them as taxi services, or register them under a new mechanism; their regulation in the near future is quite certain. However, while modelling a specific taxation regime is immediately needed to sustain this novel industry, the administration should also make use of the current opportunity to carve out additional security requirements that pertain to the provision of safer choices to the consumers.
