Solutions to Karnataka’s bike-taxi policy making problem

In its recent submissions on the ongoing bike-taxi dispute, the State of Karnataka submitted that its Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025 would protect the interests of any gig worker, including those working for platforms such as Uber, Ola, Zepto, etc.

The schedule of the Act states that it applies to gig workers engaged in ride sharing services, which according to the government’s submissions also include bike-taxi drivers.

Interestingly, this Act was given assent just a day after reports emerged that the Karnataka government constituted a high-level committee to examine the operations of bike-taxis in the State, which was in turn pursuant to the Karnataka High Court’s remarks on August 21 that “Every trade is permissible unless specifically prohibited. You may regulate, but regulation cannot mean complete prohibition.” The Court had granted the government a month to decide whether to frame a bike-taxi policy or not. Meanwhile, the Court also added that the State could not indefinitely refuse to frame a policy while effectively banning the sector, bringing an end to months of legal uncertainty.

The current tussle stems from a single-judge bench order dated April 2, 2025, which removed the stay on banning bike-taxis in Karnataka. A division bench of the High Court later denied extending the stay since the Court noted the government’s stance to not frame a policy on the same, which effectively brought bike-taxi operations to a halt on June 16 until they later re-appeared on August 21. This was also pursuant to the Advocate General’s submissions that the State at the “highest level” would consider framing a policy. The Court further granted the State time till September 22 to conclusively decide on the matter.

In light of the current submissions of the State in the High Court, the new Act seeks to cure the bike-taxi issue. However, it majorly addresses only one side - the grievances of a platform worker. While truly commendable, the legislation does not touch upon the issue of legality of bike-taxis and instead recognises and crystallises the workers’ rights.

This post, drawing from the Motor Vehicles Act 1988 and transport regulations across Indian states, presents a practical solution-based blueprint for addressing the legal lacunae with respect to bike-taxis, and the host of options that the State may adopt in framing a new policy or adapting existing frameworks.

Under the Motor Vehicles Act, 1988, for bike-taxis to function, there are two essentials: registration as a transport vehicle and a contract carriage permit. The 1988 Act's definition of transport vehicles encompasses any motor vehicle carrying passengers for hire, specifically including vehicles with fewer than four wheels and engine capacity exceeding 25 cubic centimetres. Arguably, a two-wheeler qualifies for this criterion. This was emphasised by the Ministry of Road Transport and Highways in an advisory issued to the states.

While the Act confers powers on the state governments to make laws for such contract carriages, the Central government, in 2019, following the amendment to the Act, formulated the Motor Vehicle Aggregator Guidelines 2020, which were further updated in 2025 to act as a guiding framework for states. These guidelines, while designed to ensure regulatory consistency, face jurisdictional limitations. The Supreme Court's 2023 ruling in Roppen Transportation Services v. Union of India clarified that such Central guidelines possess merely "persuasive value" rather than mandatory force. Another such notification issued in 2004 also permits both two-wheelers and four-wheelers to be classified as contract carriage.

The second requirement for bike-taxis is getting a contract carriage permit (those vehicles acquire a yellow number plate). While the Motor Vehicles Act gives riders the legal right to apply for these permits, and the Supreme Court has confirmed that transport authorities cannot deny the right to make such an application, most Indian states have failed to create proper systems for issuing permits to two-wheelers, as analysed further. Thus, in recognition of the same, the updated Motor Vehicle Aggregator Guidelines 2025 sought to allow regular motorcycles (those with white number plates) to operate as passenger vehicles through app-based platforms, provided state governments give their approval. The update builds on earlier exemptions granted in 2019 for electric vehicles and those running on alternative fuels like methanol and ethanol.

Pursuant to the new Act, in Karnataka, workers are also required to be registered with the Karnataka Platform Based Gig Workers Welfare Board (separate from the requirements under Motor Vehicles Act requirements). This, however, would be post-onboarding on the aggregator platform instead of acting as a pre-requirement. Section 7 of this Act says that the time period is inconsequential.

*Yes, as operators recommenced operations after the High Court’s remarks. However, notably, the Court did not grant an interim order to allow for lifting the ban.

**While the news reports indicate a crackdown on bike-taxis by the government, an independent check conducted by the authors indicates that one may book a bike-taxi in major cities in Madhya Pradesh through online platforms.

***This is pursuant to the Exemption Circular, which was adopted by the respective states.

****The State is currently under President Rule. Thus, no.

*****For Union Territories without their own legislative assemblies, guidelines issued by the Central Government are binding. Thus, the respective UTs, the Union Guidelines 2025, would apply.

There is a lack of uniformity and ambiguity, as most states have not enacted any policy on bike-taxis. The table also indicates that not having a policy in the state does not mean that bike-taxis are illegal. A unique combination is also the states of Haryana and Gujarat, which, instead of enacting special legislation, have accommodated bike-taxis under the existing framework by just accepting the definition prescribed in the advisory by the Ministry of Road Transport and Highways.

The regulatory landscape analysis reveals that there are several pathways that the State may choose for specifically regulating bike-taxis. It could adopt the Union government's Motor Vehicle Aggregator Guidelines 2025, which represent the most updated and comprehensive framework available. These guidelines allow regular motorcycles with white number plates to operate as passenger vehicles through app-based platforms, building upon earlier exemptions for electric vehicles and alternative fuel vehicles. This approach would provide immediate regulatory clarity, ensure alignment with national standards and minimise implementation costs by leveraging existing central infrastructure.

However, there is a major regulatory gap in these guidelines, as they do not address independent bike-taxi drivers who are not associated with any aggregator platforms. It remains unclear whether they can function as non-transport vehicles even if Karnataka adopts these guidelines, potentially creating a two-tiered system that favours large aggregator companies while marginalising individual entrepreneurs.

Alternatively, the government could adopt a more strategic approach by incorporating the Ministry of Road Transport and Highways' advisory on the definition into its existing aggregator guidelines framework. Since Karnataka already has a well-established framework in the form of the Karnataka Motor Vehicles Rules, 1989 and the Karnataka On-demand Transportation Technology Aggregators Rules, 2016, this solution would leverage the current administrative infrastructure while expanding the scope to include two-wheelers under the transport vehicle category. It is also cost-effective, gives the State more autonomy in independently regulating its policy and allows for maintaining uniformity without a comprehensive policy overhaul.

Karnataka could also consider reviving its 2021 bike-taxi policy, which had previously provided a regulatory framework before being shelved. This approach would demonstrate policy continuity and could address earlier concerns through updated provisions based on operational experience and stakeholder feedback gathered since 2021. Reviving the existing policy would also provide familiarity for market participants who had previously operated under this framework, reducing regulatory uncertainty and could further expand it to internal combustion engine vehicles if required.

Finally, the State may, in accordance with its submissions, frame an entirely new policy tailored specifically to its unique urban mobility challenges and technological ecosystem. This approach would allow for comprehensive stakeholder consultation, incorporation of best practices from other states and customisation to Karnataka's specific geographical and economic contexts. However, any new policy framework must address the persistent challenge of independent bike-taxi drivers who operate outside aggregator platforms.

While the legal untenability of the State’s decision is already under question in court, it’s in the greater interest of the State to choose to allow bike-taxis. With infrastructure already playing a catch-up game in large cities, the State is already facing problems of worsened traffic congestion as people return to private vehicles or auto-rickshaws. People in the middle and lower-income groups have been forced to bear the brunt of increased transportation costs. Submissions have also been made in court on the impact that this devastating decision has had on the livelihood of over 6 lakh people. The State is also home to the country’s largest players in this market, which is slated to soon be worth over 5 billion dollars. Therefore, allowing bike-taxis is not just a regulatory necessity but an economic and social imperative for Karnataka's sustainable urban mobility future.

Prof Fakkiresh S Sakkarnaikar is a Professor of Law and Head of the Research and Development Cell at Gujarat National Law University, Gandhinagar.

Gauri Bagali is a student at Gujarat National Law University, Gandhinagar.