Karnataka High Court Revokes Bike Taxi Ban, But Says State Can Impose Necessary Conditions

The Karnataka High Court on Friday (January 23) allowed a batch of appeals preferred by aggregators OLA, Uber, Rapido as well as others challenging the Bike Taxi ban in the State.

The parties had challenged a single judge order which held that bike taxis cannot operate in the state unless the State government issues relevant guidelines and rules under the Motor Vehicles Act.

A division bench of Chief Justice Vibhu Bakhru and Justice CM Joshi today said:

"In view of the above taxi owners are at liberty to file applications for registration of the vehicle as transport vehicle...we direct the State government to consider such applications for registration of owner of vehicle as transport vehicle and grant permission to operate as contract carriages. While concerned authority are not precluded from examining the relevant aspects, the same will not be denied on the ground that motorcycles cannot be operated as transport vehicle or contract carriages. The regional transport authority may impose such conditions as it may consider necessary...in accordance with law, having regard to Section 74(2) MV Act. Aggregators are also at liberty to file fresh applications...and in the event such applications are filed they will be considered in accordance with law and observations of this court. Impugned Order is set aside and Appeals are allowed in the aforesaid terms". 

A detailed copy of the order is awaited.

The Taxi aggregators Rapido, Uber, OLA among others had argued that the ban by the State violates the aggregators' fundamental right to trade under Article 19(1)(g) of the Constitution. It was argued that while the single judge found that it was correct that a motor bike can be registered and is entitled to a carriage permit, it was held that the state had taken a policy decision that it would not allow bike taxis.

It was argued that State cannot, by executive action, claim to have a larger right and override all these provisions, as that would be in contravention of the MV Act. It was also submitted that under provisions of Law, there can be some restrictions framed, but if the MV Act permits registration and gives a permit, the State cannot disallow the operation of the same as it is in violation of the statute and constitutional guarantees.

Meanwhile the State had argued that “motorcycle cannot be a transport vehicle”, insisting that the statutory definition does not contemplate its use for carrying passengers or for hire.

It was argued that if a motorcycle were to be considered a transport vehicle, “it is not a passenger vehicle and not to be used for hire or reward.” Reference was made to Section 67(3) of the Motor Vehicles Act, to submit that the provision gives the State Government overriding power to “modify any permit issued under this Act or make schemes for the transportation of goods and passengers and issue licences.”

For context the single judge had in April ruled that "unless the State Government notifies relevant Guidelines under Section 93 of the Motor Vehicles Act, 1988 and Rules thereunder, the petitioners (Ola, Uber, Rapido) cannot operate as Aggregators offering Bike-Taxi Services".

The court had then further said that the State's Transport Department cannot be given directions to register Motorcycles as Transport Vehicles or issue Contract Carriage Permits. For context, contract carriage permits are issued by state governments which permits a vehicle to be used for the transportation under a specific contract, usually for a fixed purpose.

It had further ordered the State government to ensure that all bike taxi operations cease to operate in six weeks. This date was extended till June 15, 2025. Thereby, Bike Taxis were to cease operations from June 16 in the State.

Case title: Uber India Systems Private Limited AND State of Karnataka and batch

Case No: WA 848/2025, WA 863/2025, WA 906/2025, WA 962/2025, WA 948/2025