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Tootle-Pathao controversy: 5 years on, Nepal undecided between legalising ride-sharing and banning

On March 22, 2021, a Pathao rider was assaulted by a taxi driver at Gongabu of Kathmandu claiming that the Pathao rider lured his customer away by offering a ride at a low fare. This clash has revived a controversy on the operation of ride-sharing apps such as Pathao and Tootle. The controversy, meanwhile, highlighted the urgent need for a law to regulate them.

This controversy started as soon as Tootle launched a ride-sharing service on motorcycles and taxis in December 2016. At that time, the government responded saying it was illegal to ferry passengers on private vehicles.

Not only the government officials, but transport entrepreneurs also tried to stop this service many times. But, with the widespread popularity of the apps among service users, the government has neither been able to shut down the service nor give it legitimacy. Due to that, there have been lingering problems in this business.

Legal issues

Not only the service-providing companies but also the passengers, riders, traffic police, and officials of the Department of Transport Management are confused as the ride-sharing service has not been brought into the legal framework for a long time.

Asheem Man Singh Basnyat, the regional director of Pathao, says many difficulties have arisen in the operation of the service as the government has not enacted a law to address this area.

Public transport expert Ashish Gajurel assumes if the issue about the use of technology in transport is not addressed on time by formulating a law, it will have negative impacts on other sectors of transportation.

Gajurel sees the government’s indifference has created disputes among riders, passengers, transport entrepreneurs, ride-sharing companies and the government.

Further, he adds, “The government’s tendency to remain silent by not resolving immediate disputes has increased the risk of the service becoming ineffective, of poor quality and unsafe.”

Gajurel also suggests it is not difficult to formulate the rules by studying its practice in neighbouring countries such as India and Bangladesh.

The legalisation bid

Companies such as Tootle and Pathao are registered with the Office of the Company Registrar and not with the Department of Transport Management. Therefore, these companies are not regulated by the department. 

Also, the Department of Transportation has been saying time and again that it is illegal to use private vehicles to pick up passengers. It is also mentioned in articles 8 (1) and 12 of the Motor Vehicles and Transport Management Act, 1993.

Lok Nath Bhusal, the spokesperson of the department, says that in the draft of the Federal Motor Vehicles and Transport Management Bill, it has been proposed to make arrangements to take/ give passenger services from the ride-sharing app.

“The draft has reached the ministry. Once it reaches the parliament and becomes law, we can regulate the ride-sharing service by issuing procedures,” he mentions.

Authorities in dilemma

But, until that, the authorities are likely to be in dilemma.

Owing to the Motor Vehicles and Transport Management Act, the government had urged the companies to stop this service many times. Some riders were even taken into custody by traffic Police. However, every time the service recipients/ public massively protested against this move of the government. Following the protests, the government at the end had been directing to stop the action against the ride-sharing services.

Not only the government but the Patan High Court, while hearing a petition filed by an association of the taxi owners, had also ordered not to stop the ride-sharing service immediately and to make necessary laws after the public stood in the favour of ride-sharing services.

This issue was taken to court after the taxi operators picketed the Department of Transport Management against Tootle and Pathao on March 10, 2020. All of this has created a lot of confusion regarding this service.

Meanwhile, the service providers have also been resisting the government order to shut down the service. There has been a moral crisis on the government’s part to ban such services as passengers are in favour of such services.

Meanwhile, the Bagmati provincial government has introduced legal provisions that allow private vehicles to operate for public purposes in the specified areas by taking a fixed fare. After the implementation of the 2015 constitution, the right of transport management has shifted from centre to provincial governments.

However, the provincial government has made neither the regulations to implement this act nor any procedure to register such companies.

Meanwhile, the transport entrepreneurs are also questioning the law of the province. According to them, the provincial law should not contradict the federal ones.

Transport entrepreneurs, who are operating at a loss due to Tootle and Pathao, have been protesting owing to the federal government’s act. Saroj Sitaula, the general secretary of the Federation of Nepali National Transport Entrepreneurs, says the tendency of the government to remain silent even when private vehicles are ferrying passengers is a mockery of the rule of law.

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Ghimire is a senior business journalist at Onlinekhabar.

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