India: Bus aggregator Zipgo suspends Bengaluru ops after Karnataka transport dept raids office

Visual from ZipGo website

ZipGo Technologies Pvt. Ltd has suspended operations in Bengaluru after the Karnataka state transport department raided its office on Wednesday, alleging that the bus and mini-van aggregator is violating rules by operating without necessary permits.

The transport department has served a notice to ZipGo asking the firm to provide documents of the licences and other details of the vehicles that are aggregated on its platform. The regulator alleged that ZipGo is running a stage carrier service, similar to state-owned buses that picks up and drops passengers at various locations, at different fares.

The vehicles plying on ZipGo’s platform are issued contract carriage permits that allow them to pick up passengers from one pick-up point and drop them at a final destination, the regulator said.

ZipGo operates an app that allows registered members to book rides along different points on preset routes, similar to a city bus or shuttle service. This kind of a service pits ZipGo in direct competition with state-operated city bus service Bangalore Metropolitan Transport Corp., said Narendra Holkar, joint commissioner (enforcement) for transport.

“Maxi cabs can operate in the city if they are under a contract with entities like schools, companies, colleges… it also operates for private tours and travels but this is mostly inter-city and not intra-city,” said Ramegowda, transport commissioner, Government of Karnataka. “What they (ZipGo) are doing is illegal.”

The rise of ride-hailing cab services such as Ola (operated by ANI Technologies Pvt. Ltd) and Uber Technologies Inc. over the last few years without the necessary regulatory provisions has spawned multiple new transportation services aping the on-demand model for bikes, shuttle services and shared rides.

A number of companies—Shuttl, Cityflo, RBus—are already operating app-based shuttle bus services in other cities, including Mumbai and Delhi. Ola, India’s largest cab-hailing service, is testing a shuttle bus service in Delhi where passengers are picked up and dropped at various locations for a flat fee.

Many app-based transportation firms have started such businesses in the hope that regulations will catch up once the operations expand as in case of cab aggregators.

The legal tussle between Ola and the US-based Uber with regulators across the country led to central government creating regulations in November that govern app-based ride-hailing companies. However, the provisions of the new central government regulations are not binding on state governments.

ZipGo launched a women-only bus service in Delhi earlier this week, but Karnataka transport officials say they are in no mood to allow companies to “violate rules in the name of technology and aggregators”.

Also Read: 

On-demand bus aggregator CityFlo gets $733k in seed round led by IDG Ventures

India: Bus aggregator Shuttl raises $25m from Lightspeed, Sequoia, and Times Internet

This article was first published on Livemint.com

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.