Why Uber and Careem are illegal and who is favoring the taxi service?

Careem taxi service launches new brand identity

After the initiation of a crackdown on Careem and Uber taxi service by Traffic Police and Punjab Transport Authority (PTA) on account of non-compliance of motor vehicle rules, Punjab Information Technology Board (PITB) has put its weight behind the taxi service. A recent tweet from Dr. Umar Saif hints that he is in talks with higher authorities, most probably with CM, to eithe relax the rules or make new ones so that the banned taxi services could continue their operations.

However, an official of the transport authority while talking to MORE clarified that none of the taxi services is registered with the government of Punjab and despite various communications, they deliberately ignored the requests and recommendations of transport authority.

“We had several meetings with the representatives of Careem and Uber who were informed to do compliance with the Punjab Motor Vehicle Rules. However, they never paid attention”, the official stated.

A few months ago, the CEO of another taxi service, Limofied, a rival as well, had also expressed similar reservations on the legal status of Careem and Uber and also questioned their service quality.

A similar legal action has also been initiated in Sindh Province where authorities have also approached Pakistan Telecommunication Authority to stop the mobile application of these taxi services.

Although the applications are working normally on cell phones, however, a PTA official confirmed that the authority had summoned a meeting of concerned departments and the companies.

“We will try to mediate and resolve the issue so that rules of the land are not violated, and at the same time the operations of these companies are not suspended”, the official commented.

What haunts the Punjab Transport Authority?

According to motor vehicle rules, vehicles can be classified as either as private or commercial.

  1. A private car cannot be a taxi. It has to have the logo of a company on it for being recognized as a taxi.
  2. A taxi (vehicle) has to pay more tax than a private car
  3. It has to get a fitness certificate prior applying to get registered with Excise and Taxation Department
  4. The personal records of a driver needs to be scanned and verified for the security purpose
  5. Upon fulfilling the above, the vehicle and driver get the license and route permit
  6. The company operating those taxis must be registered as a “Rent A Car” company.

According to transport authority, both of these companies are not registered with any department in Punjab and hence, they are the security risk for the citizen of the province.

“We have confiscated more than 100 such vehicles which are not complying with the rules”, the official of transport authority confirmed.

The transport authority has already seized more than 100 taxis in a drive to discontinue their operation.

We tried to contact the representatives of Uber and Careem to know their viewpoint; however, no official responded to the queries.

Why don’t they comply?

  1. They work as a mobile app company; hence they don’t own the taxis
  2. Since taxis are not their property, they are not liable to pay tax
  3. There are no relevant laws for such mobile services

How revenue is shared between Uber and the Driver

  1. The mobile app company takes 20% of the amount of ride as their share
  2. From the rest, driver has to make savings after paying for fuel and other expenses
  3. The driver also gets a bonus of nearly Rs. 2,800 (economic car) on completing 12 rides a day. Whereas, the business ride has a premium of Rs. 4,500 a day on completing a certain number of rides.
  4. Nearly, a driver with good rating can earn 50,000 to 70,000 a month.

After the news of ban had started circulating, the people took to the social media for registering their anger since the taxi service is providing a decent alternative to old crampy transportation the city offers even today.

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