Regulating Taxi Service Aggregators

By Jayati Narain*

Those flying in or out of Kochi in the last few weeks, booking a Uber or Ola may have dealt with some odd requests by their taxi drivers. When being picked up, passengers are requested to meet their drivers outside the departures terminal, and when being dropped off they are warned they might have to take an auto for the last few kilometers, or complete the payment formalities before reaching the terminal.

Similar issues are being faced with those using these services to the train stations and to Lulu mall.

The reason behind these requests is the opposition by taxi unions, against such companies. In Kochi some cars operated by Uber were attacked by local taxi services (http://www.dnaindia.com/india/report-kochi-drivers-of-services-like-uber-ola-attacked-by-local-taxi-drivers-2135757), as had happened in Mumbai a few moths before (http://timesofindia.indiatimes.com/city/mumbai/Scared-Uber-drivers-stay-off-roads-fearing-attacks/articleshow/48474969.cms). Taxi unions are protesting the unfair advantage that these companies enjoy in the market. While companies like Uber and Ola function as taxi operators and are direct competitors to traditional taxi services, they do not have to follow the same pricing mechanism as followed by traditional taxi services. This is due to the fact that at the operations end these companies do not identify themselves as taxi services, rather they identify as IT companies. The business model followed by these companies lead’s to a number issues regarding regulation and licensing.

These regulatory issues are present around the globe. With the growth of disruptive technologies and business models, legislators around the world are grappling with how to amend existing laws to make a place for these companies within their legal structure. The first step towards this has been the coining of the term transportation network companies (TNC). The term refers to the business model followed by these companies ‘an online-enabled platform that connects passengers and drivers using their personal and noncommercial vehicles.'Taxi service aggregators, such as Uber and Ola, provide a technological platform to bring together drivers and riders. The app acts as a way of connecting riders with the driver closest to them. The companies themselves, do not own any of the cars, nor do they consider the drivers employees. They identify themselves as facilitators, partnering with drivers to provide a service. While, at the consumer end they seem to be taxi-company with a convenient app, at the operations end they are very different. This model sets them apart from traditional transportation services, which require separate legislation. Clubbing all these services under the same legal framework is not feasible as their mode of operation, and treatment of drivers is completely different.

Developing the required legal framework has not been an easy task, both from the point of view of the TNC’s and the lawmakers. Each group has it’s own priorities and stakeholders to keep in mind, when framing any sort of regulating policy. This is complicated by the fact that is most countries transport is a state subject, requiring each state or city to frame it’s own laws, based on the specific local situation.

In India it is no different, with transport being a subject on the state list. However, a number of factors have brought these services to a national spotlight, leading to the central government getting involved in the framing of regulations. Issues involving passenger safety, regulating policies, registration and pricing mechanisms have all come together, sparking a national debate on the operation of TNC’s. This debate gets further complicated and confused, when looked at it within the global context, as a number of countries and cities are in the process of incorporating such services while keeping competing interests in mind.

The problems faced by TNC’s in India, can broadly be identified as those relating to safety regulations and the pricing mechanism. The central government has laid out the legal framework outlining regulations regarding TNC’s and has left it to state governments to work out the state specific laws, such as registration and monitoring.

After much back and forth in October 2015, the Central government issued an ‘Advisory for licensing, compliance and liability of on-demand information technology-based transportation platforms.’ The most significant aspect of this has been the distinction made between taxi companies and technology-based aggregators. While the advisory does allow for the business model followed by these companies, it also requires them to take greater accountability of the drivers engaged in the service and take greater safety precautions. While this step is encouraging, it still leaves these companies in a legal grey area. Currently they are placed under the domain of the Ministry of Road Transportation and Highways, coming under the Motor Vehicles Act. In order to operate in any city they are required register under this with the state government. In most state’s they have been required to get the same license as a radio taxi or city taxi service. The reason for this being that, even if these are technology companies they are in the transportation business and should be classified as any other transportation company.

Such a situation raises certain paradoxes in the operation of TNC’s. While the Centre recognizes them as separate from traditional taxi services, states require them to register as such. Even when they register as taxi services in various cities, they are not required to follow the same pricing scheme as traditional taxi and auto operators are. They are faced with opposition from both sides, wherein the state government’s do not recognize them as IT companies, and traditional services view them as having an unfair advantage in terms of price regulations. Much of the national debate surrounding TNC’s and the push back against them have combined these issues, hoping that they can both be resolved together.  But as the experience of various cities is showing, there is no one simple solution. Rather, both these issues- of registration and pricing need to be dealt with separately as each involves different stakeholders and has a different impact.

Within India, Kolkata has been the first city to deal with these issues separately. West Bengal has allowed these companies to register under the IT Act (2000) (http://articles.economictimes.indiatimes.com/2015-01-15/news/58109056_1_radio-taxi-scheme-web-based-taxi-aggregators-taxiforsure). They have separate laws regulating the service aggregator (IT Act) and the actual driver (Motor Vehicles Act). Such a move most closely matches the mode of operation of TNC’s themselves, which do not take responsibility for the driver unless they are specifically operating under the companies banner at the time of an incident.

The logic behind the pricing mechanism set up by the government for traditional transportation services is not something that can easily be found or broken up. This is an issue that is being faced by taxi operators around the world, leading to the recognition of the fact that these structures require a degree of revision. As several writers have argued, the regulation model for taxi companies is outdated, when facing the kind of market competition coming up now (http://www.newyorker.com/tech/elements/the-long-history-of-the-fight-against-uber).

In order to deal with the growing resentment by traditional transport services, TNC’s have tried to incorporate them into their operations. In Kolkata, the city’s iconic yellow taxies have started partnering with Ola (http://www.business-standard.com/article/companies/kolkata-s-yellow-cabs-now-on-ola-platform-115082800928_1.html), and in Chennai, Ola has been running an Ola auto service, partnering with auto-rickshaw operators, a service they are spreading to other cities as well. Such partnerships do not actually have a direct monetary benefit for the TNC, the operator or the consumer, but they have still been positively received. While the traditional operators still have to follow the same pricing structure, they have guaranteed riders and are viewed as embracing the shifting market trends. For customers paying a Rs.10 service charge, is worth the door-to-door by the meter service. For the TNC’s, it is an extension of their brand visibility, and technological interface.

Instances like this prove that there are viable solutions available to these problems. However, in order to achieve them the state government, the TNC’s and the traditional transport services need to work with a level of cooperation.

In Kochi, it is this cooperation that is missing at the moment.

While the state and city government have not openly taken sides, political parties are turning this into a contentious political issue. With parties backing the idea of traditional transport services coming up with a call taxi service, with an app of their own (http://scroll.in/article/765228/in-kerala-uber-and-ola-have-competition-from-the-states-biggest-business-house-the-cpim). Such a move may make their use more convenient, but it does not deal with the issue of pricing, which is where these companies are actually losing out. Unless, the state government tackles these issues directly, the antagonism between these services will continue to grow.

This can be done through following a model similar to that followed by the West Bengal government. By recognizing the TNC’s as IT companies, it makes it easier for the government to monitor and regulate them. As the TNC’s can no longer argue that they have been miscategorized. By partnering with TNC’s traditional operators are able to recapture some of the customers they have lost. This allows them to supplement their incomes, something the government set pricing scheme is limiting rather than facilitating. Until the government is ready to revise the pricing structure, they cannot blame consumers and drivers for moving to services, which are more convenient and affordable.

As customer behaviour is showing, even with the curbed movement, TNC’s are continuing to find passengers in the city. These companies are clearly here to stay, requiring the government to address the fundamental issues, rather then providing makeshift solutions.

*The author is the managing associate of CPPR- Centre for Urban Studies. Views are personal.

Role of the Mayor- Moving Beyond a Figurehead

By Jayati Narain*

The Mayor of Kochi, is not only the head of the Cochin Corporation, but is also the representative and face of the city. Unfortunately, this is a position that is merely become a token one, coming to the forefront only at times of election. Local urban bodies rather than actually leading development and growth in cities have become an extension of the state government. Thus, the elections that took place over the past week are actually more critical to political parties from a state perspective, rather than a local one.

The sidelining of the Corporation is the result of a failure to implement existing provisions, rather than a weak structural framework. The mandates and laws governing decentralisation in India at the Centre and state level do provide a wide scope for local governments to work at a grassroots level and develop according to the needs of the area. This is critical, especially in urban areas in Kerala, as the state has a growing urban- rural continuum and the significance of cities feeds in to that of the state. Unfortunately it is this developmental and economic overlap that seems to be working against the urban local bodies.

While it is difficult for any mayor to change the rules concerning their finances and political power, they should at least be able to address the issues relating to administrative power. This would not be demanding any extra powers, rather asserting the powers already guaranteed to them. A strong mayor would thus be one that is not just planning for the development of the city or addressing existing civic issues, but who understands the system that they will be working within. It is only with a clear understanding of the system that the mayor and her council will be able to maximise their level of influence and control in city development project.

The functions of the mayor and the Corporation are often unclear, even to those in office. This may be attributed to the fact that often, political parties do not invest much in the candidates standing for local bodies. Thus, generally local government is not a stepping-stone for a longer political career, rather these candidates act as placeholders for the party. Thus, the lack of experience and practical knowledge about the post is not something that is given much importance by the party. Often, rather than being oriented to their roles and responsibilities (beyond the week long sessions held by KILA) candidates operate as low level bureaucrats for the state.

In order to have a strong local government, candidates must be clear about the extant of their power and jurisdiction. It is only when they have a clear understanding of the system can they work within it effectively. The process of making urban local bodies more efficient and autonomous is cyclical one. Once the corporation begins taking advantage of all its powers, and limiting the power of the state it will be given greater importance, which may in turn lead to it being able to demand a greater degree of autonomy.

Kochi, the commercial capital, and the only city in the state shortlisted in the 2nd round of the smart city project, obviously holds much political significance. This has led to some of the provisions in the Kerala Municipal Act getting overshadowed by larger political interests. Even when the ruling party at the state and local level are the same, a friendly political climate, the powers of the corporation have constantly been undermined by the state and parastatal agencies.

According to the 12^th schedule of the constitution, article 243 W, ‘Public amenities including street lighting, parking lots, bus stops and public conveniences’, come under the purview of urban local bodies. However, bus stops constructed by the town planning commission of the Cochin Corporation were demolished by PWD, based on the grounds that the roads were maintained by the PWD thus they have authority over construction along it. Similar examples of parastatal agencies over stepping their jurisdiction are present in the case of several provisions set in place to empower urban local bodies. In the case of  ‘roads and bridges’, and ‘water supply for domestic, industrial and commercial purposes’, agencies such as the Kerala Metro Rail Limited and the Kerala State Water Board have played a much larger role, than constitutionally mandated. This is due to the lack of coordination and overlapping responsibilities that come up between these agencies and the corporation. While these agencies are working for the city, it is at the cost of the city administration. The benefits of such projects are thus geared towards the state government rather than the city government.

The first step towards avoiding such situations, or planning them better would be for the role of the mayor to be clear. The mayor presides over all the standing committees of the council, and is supposed to have regular meetings with them. She/he is a representative of the city to the state and Central government. Thus, the work done by them is principally for the city, and the socio-economic development of the city is in their hands.

A strong mayor need not be a charismatic personality or a strong willed individual. They should be able to work within their existing administrative structure, and understand it well enough to reap maximum benefits from it. Looking at the growth and structure of cities around the world, this is definitely something that is achievable.

The last 15 years have seen the city of London grow and develop at a massive pace. The last 2 mayors of London, Boris Johnson and Ken Livingstone, are actually the only two official mayors of the city. It was due to Livingstone that the position of the head of the Greater London Council was officially given the post of the mayor. While the current mayor Boris Johnson is credited with many the reforms the city is taking towards sustainability and being more environmentally friendly, many of these reforms were initiated by Livingstone. The congestion tax as well the bicycle rental scheme now known as Boris Bikes, were developed under the tenure of Livingstone. Without getting into the arguments of London city politics, and the assigning of blame and responsibility, the examples of Johnson and Livingstone exemplify how a political structure can be used to the fullest by a city mayor. Even though the two represent different political parties, they both followed and implemented similar policies as mayor of London. Johnson, known for being more vocal and theatrical may have been able to garner more publicity, but the alone does not qualify him as a strong and successful leader. Rather it was the decisions and outcomes of his policies that qualify him as being effective.

While the concerns and priorities of the mayor of London are very different from those of the mayor Cochin, they may serve as examples. The key point being that regardless of the political system being worked within, there is always room for the mayor to assert their power.

Currently in Kochi the state government and parastatal agencies are subsuming this power. Thus, an important part of the agenda of the next mayor should be how to take back some of their power, and tip back the scales in favour of city government. This would be useful not just in making the corporation more effective, but also prepare them to deal with challenges that are sure to come if Kochi is selected as one of the city’s to be funded by the smart cities mission.

* Author is the managing associate of CPPR- Centre for Urban Studies. Views are personal.

Determinants of the Cochin Corporation Election

By Gowri S.*

Two decades have passed since the 73^rd and 74^th amendments were enacted, and now Kerala has 978 Grama panchayats, 152 Block Panchayats and 14 Zilla Panchayats in the rural areas and for the urban areas, it has 60 Municipalities and 5 Corporations and therefore a total of 1209 Local Self Government Institutions.

Formed on 1 November 1967 by merging the municipalities of Fort Kochi, Mattancherry and Ernakulam, the Cochin Corporation today is divided into 74 administrative wards from which the corporation council members are elected for a period of five years. The elections for the next council will be held in November.           

                                         

Here we try to look at the elections to the Cochin Corporation and understand the political setting of the city, from the point of view of the councillors. Political parties and media outlets try to gauge the mood of voters, in order to work out what will be the decisive issues for the coming elections. This is particularly important for the parties, as their campaigning strategy would be built around discussing these issues and their relevance to the city.

Interviewing a number of local councillors this summer, it became clear that there are certain issues that seem to cut cross political boundaries. While the manner in which various parties approach these issues may differ, they definitely seem to be matters that are on each parties radar.

Distribution of interviewees

Party	Ward name	Seat
CPI M	Elamakkara North	General
INC	Karanakkodam	General
INC	Ponekkara	General
BJP	Ernakulam Central	Women
INC	Vytilla	Women
INC	Ernakulam South	Women
INC	Vytilla Janatha	Women
INC	Pachalam	Women
INC	Ravipuram	Women
INC	Ayyappankavi	Women

While the sample interviewed (see above table) is in no way exhaustive, it does allow for some general observations regarding what the politicians consider to be determining factors in this election.

Determinants of election

      Local level issues:

It is no surprise that local level issues and problems faced by the people on a day to day basis are the most significant factor in the Corporation election. Transportation, infrastructure, waste management, water availability, mosquito menace etc. form the core issues on which people vote. It is from here that an evaluation of the present council and expectation from the next determine who comes to power next.

      National and State level issues:

The major social, economic and political factors affecting the State and parliamentary elections also have an influence on the local body polls. The anti-corruption mood of the nation, welcoming new actors and the promise of development had influenced the National elections and for the coming state assembly elections too, these factors are likely to make an impact.                      

Also according to the election schedule of the state, the local body polls will be followed by assembly elections in the next year. Until now the front which has won the majority in the local body polls has been able to win a majority in the assembly elections as well. Thus, not only are local body elections an indicator of the state assembly elections, but also a crucial test for parties in order to succeed at the state level.

          Party and Candidate:

The stature of the candidate and which party she/he represents are influential when it comes to the election. Out of the total 74 candidates in the last election, 11 of them are either in their consecutive second or third term. A good portion of the voters today still have ideological affiliations and vote accordingly. 

      Anti-incumbency:

Anti-incumbency feelings play a very important and noteworthy role, especially in the context of Kerala. It worked in favour of the UDF in the 2010 elections and may work against it in the upcoming one. It is the bipolar nature of the state politics has led to this pattern, and the opposition is likely to build its campaign around the incumbency feeling of the people.                                                                                       

According to a report by the Lokniti studies, 56 per cent feel that a change in government every five years is beneficial for development. This is may also be one of the effects of the high education rate, with more people ready make full use the democratic process.

      Caste and religious mobilisations:

In the local body polls, the caste influence is visible in the nomination of the candidates, this due to the fact that the demographic setting of the constituency and communal sentiments are very relevant to the elections.                                

Caste and religious mobilisations too influence the election verdict especially in the State and parliamentary elections; here the coalition partners, become of key importance. Thus vote bank politics ,and community & identity based continue to function.

How people vote in the upcoming local elections is yet to be seen. Based on the interviews conducted, an idea can be given as to how the party representatives are viewing the election. How they choose to prioritise and frame these determinants will be seen through the course of their campaigns.

The ability of the two fronts to absorb any new emerging parties prevents a new face from coming up. While the BJP could be expected to win a few seats, no doubt due to the its dominance at the Centre, it wining a majority is still unlikely.                               

This election is likely to once agin put to test the established patterns of; a result towards anti-incumbency, and the Corporation and state level success of the same party.

* Author was an intern at CPPR. All views are personal.

Photograph: Jon Super/AP

Kochi Smart City - clarity in thought process required

by D. Dhanuraj

The discussion and debates on Kochi Smart City are very much in newspapers every day. Kochi is one among the 98 cities shortlisted in the Smart City development plans of Government of India.  I had the chance to attend one of the stakeholders meet organised by Kochi Corporation.  There was high participation at the meeting. Everyone was given 3 minutes to discuss their ideas and views that could be added to the proposal.  All proposal are very interesting and noteworthy. I wish to share my views here;

The idea of Smart City is very ambiguous one. it is not about the projects like building malls or flyover alone. It is all about visualising Kochi as a smart city. In the meeting held, most of the proposals were projects like Housing, Tourism, Transport, etc. I would argue that they are the tools to reach a smart city concept and before finalising them, we should have clarity on what is Kochi Smart City? How are we going to evaluate the success of the Kochi smart city and what are the parameters used to measure the success?

The scale for measuring success of a smart city could be many;
1) how many have shifted to the public transport at the end of phase 1? 2) what is the reduction in carbon footprint at the end of phase 1? 3) what percentage of services under Kochi corporation could be accessed and availed on smartphones and in the digital world? 4) how much of the waste and garbage are treated in the city at the end of phase 1? etc. etc.

A visionary document for the smart city plan is crucial. By setting this framework, one can go back to the board room dissecting the various demands and gaps in the town at present.  It could include projects like that one mentioned above. Otherwise, there will not be any difference between JnNURM projects that we had from 2005 onwards and the proposed one. Most of the times we are motivated by the grants and loans provided by the State government and Central government. We have the experience lack of visionary planning in waste management, transportation, etc. for the money that we had received under JnNURM in the past. The style of operations is not going to be different this time also if lack vision for the smart city. We will end up with thousands of projects as part of Smart City plans, but they will all act and perform in silos leaving the citizens lives in misery.

Along with the visionary plan for the city, we require a powerful city council and Mayor for the development of the city. The Mayor should not be a glorified clerk but a real-time executive authority. It demands the control over the parastatal agencies that services citizens.  Mayor and council would handle the city development. They can't find an excuse in others anymore.  I wish Kochi corporation demands more power from the state government and thus ushers a new era in the decentralised of power in Kerala.