Ecommerce, Mobile, Social

The Butterfly Effect: From One Heinous Crime to National Prohibition on Technology Driven Cab Businesses

The Butterfly Effect is a phrase in Chaos Theory that implies an idea that a butterfly’s fluttering wings might create changes in the atmosphere that may ultimately cause or delay the occurrence of a tornado in another part of the world. The recent case of sexual assault of a Delhi based female can be put in this context, only that the initial crime was not small, but what it led to was not expected either.

Home Minister Rajnath Singh on Tuesday announced that he has asked all the State Governments and Union Territories to ban ‘all web based radio taxis’ following the Uber cab service rape incident on Friday in Delhi. The Delhi Transport Authority has already issued a notice against these mobile led cab services. Hyderabad and Maharashtra have also followed the lead.

Also read : Delhi Government Puts a Ban on All Operations by Uber

As according to an ET report, Delhi Police has been told by the Home Ministry officials to ask Uber to shut down its mobile application which was used to book cabs and to handover its complete database of drivers and cabs to stop it from plying in Delhi.

How Did We Get Here


Sexual assaults on women in India, especially in Delhi NCR is a crime that is common, talked about and yet persistent, nothing is really being done to make the women more safe. Mobile and web based apps came as a respite to many, a good number of professionals have to commute long distances inter and intra-city on a daily basis. GPS enabled tracking, Driver information all these things supposedly make such cabs safer than other modes of transportation particularly at late hours.

Uber Trouble

In this particular case, the perpetrator was a driver engaged by Uber. Does that make the entire company with all its other engaged drivers criminals too? No it doesn’t. The Government should be considerate about all the lives involved.

Is there a need to take an action against the company? Yes, the company which promises safety engages a serial sex offender to drive its customers around can’t be let off without accountability. However, the company referred to the clean character certificate issued by Delhi Police before engaging him. The certificate has been proven to be fake now though.

This isn’t the first time Uber has ran into trouble in India, it had earlier managed to skim past RBI’s rules by partnering with Indian payment wallet, PayTM. It is also facing heat in San Francisco for misleading customers and violating the rules there too.

Nonetheless, in India the prohibition was not only because the Government thinks cabs are unsafe, but also because the concerned services are running without a proper license from the transport authority. This was revealed only after the rape case investigation by the way. It’s still not clear how investigation about the driver led to the investigation into the company, and further into all such businesses.

What is Happening Now

Despite the hype around the ban, the web and mobile based cab services continue to be operational across the country.

“We are still trying to get the details of the ban. Though we respect the government and its rules and regulations, we are also committed to our drivers and will continue to support them as their livelihood depends on Uber. They have to feed their families and we cannot abandon them at this time of need,” Uber’s operations head for South Asia, Allen Penn told The Indian Express.

Also a false report by one of the publications stated that the users who have linked their PayTM wallets with Uber accounts can’t withdraw money from their digital wallets. The company reached out to iamWire to clarify the issue stating Paytm is an RBI licensed Wallet and the users’ money is protected under an escrow account with a National Bank. If they wish to transfer all their money back to their source funds, they have to write to and PayTM team will assist them to get it done.

And although the notice at prohibiting operations of web-based cabs was issued on Monday, like Uber, others have not received it either.

 “TaxiforSure has not received any official communication from the authorities of Delhi on stopping our partner vehicles. We will work with the Government to ensure the convenience and safety of the people, especially women”

Like mentioned earlier, these cab aggregators have GPS enabled tracking and some even provide with a tracking link to be shared with family and friends for as an extra precaution.

“We are committed to the safety of all passengers who trust Ola as their platform of choice for booking a cab. Even though we are not a transport service provider, we ensure that the partner driver who is using our software passes the stringent compliance check of his (KYC) personal & professional papers. Each and every ride of ours is tracked and all records are maintained meticulously. Traceability is paramount for us. It is our endeavor to make transportation convenient, safe and hassle free for everyone.” Olacabs official Anand Subramanian told iamWire,

The Transport Minister Speaks in Favour of Innovation

Voicing against Deputy Commissioner’s public notice on ban on all web based cabs, Nitin Gadkari, Transport Minister, said that banning an international cab service will not help the situation instead such modern facilities should be encouraged and the problem should be rectified.

“It doesn’t make sense to ban services. Tomorrow, if something happens on a bus, we can’t ban that. Similarly, if something of this sort happens on a plane, that too cannot be banned, modern services like these are being encouraged in UK and US and we must too must encourage it” Gadkari said, as per a Znews report.

It is understood that no business should function without proper licensing and registrations from the relevant authorities, but banning operations of multiple companies abruptly at a go without being concerned about the hundreds of employees engaged or the common people dependent on these services does not seem to be a prudent move.

Aggregators V/S Non-Aggregators


Six of the radio taxi services that are allowed to be operational include Meru, Easy Cabs, Mega Cabs, Chanson, Yo Cabs and Air Cabs. These service providers faced a set back since in quest for customer acquisition, VC funded cab aggregators kept on lowering their fares and created a new set of takers for the premium cab rides and the low cost ones.

The President of Association of Radio Taxis, Kunal Lalani, said in a Press conference “Competition with new technologies is always welcome. But you cannot have unregulated and unlicensed products.” This is in reference to the mobile tech startups in question aggregating cab providers instead of owning their own fleet and running on Diesel/Petrol instead of CNG.  He added that “Aggregators are spending 90 per cent time on creating demand and ensuring service supply was not their priority.”

In Mumbai, the general manager of Uber taxis was slapped by the union leader of auto-taxi community, after the Maharashtra State Government ordered a ban.

Evidently it appears that a cold war was going on between the new and the conventional. And recently Uber also threatened the auto drivers’ business with introduction of its Uber Go service, hence generating more heat in the market.

iamWire Take:

The area where the nation’s Government is falling short on action is being under informed! The action against tech led cab aggregators appear to be a deflection from the real issue. If these companies have been flouting the rules all this while, why did the blame game start only when the public spoke against the rape incident.

The Government should be well informed of all the services and companies that are running at such a big scale in the country. The rules should be clear and system should be established to regulate the businesses . Especially since the current Prime Minister of the country appears to be supporting innovation and technology, people running the country should also open up and mature to the developing technology.

Regarding the sexual offences, as it has been said time and again, unless Indian laws get stringent against crimes such as rapes, murder, human trafficking and so on, the issue will never be resolved. Blaming the employer of the criminal is not solution. The accused should be immediately punished by fast track courts.

Such practices will deter the foreign investments Indian startups are getting. Mainstream E-commerce retail companies too have been facing some or the other issue from the authorities time by time. There is an urgent need for the Government to revise and clarify the rules for the digital businesses as well. The dot com bubble had burst years back, the country and its people have come a long way since then. Technology led innovations are necessary for a developing country like India, and the Government should both coordinate and support them.

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