TRANSPORTATION IN INDIA The Law and its Application
ADITYA KINI, ZEHN
A product of WRI Ross Center for Sustainable Cities in association with Zehn THE LEGAL FRAMEWORK
Laws applicable to Motor Vehicles in India
A product of WRI Ross Center for Sustainable Cities in association with Zehn FLOW OF LEGAL AUTHORITY
Constitution of India
Who can Legislate: Motor Vehicles and other mechanically propelled vehicles fall under Entry 35 of List – III. Power to Make Laws under Art. 245 and Art. 246 r/w. Sch. VII. This means both Centre and State have power to legislate on matters relating to motor vehicles. 3 Lists under Schedule VII – Union (List - I), State (List - II) and Concurrent (List - III).
Motor Vehicles Act, 1988 r/w. Allied Rules
Consolidates law on motor vehicles Enacted by Parliament (Union) in accordance with Entry 35 Sch. VII Governs motor vehicles and motor vehicle related businesses in India
State Rules
Motor Vehicles Act, 1988, while a central legislation permits state governments to make rules in relation to the grant of permits and registrations to vehicles** However, these must be in consonance with the broad framework created by the Act.
**Sections 65 and 96 of the Act MOTOR VEHICLES ACT, 1988
• Transportation in India is primarily governed by the Motor Vehicles Act, 1988, the Central Motor Vehicles Rules, 1989 and various state rules.
• The Act creates two levels of regulation at the Central and State Levels.
• The Central Government governs the kinds of registrations and permits that may be granted in relation to the intended use of the vehicle.
• The State Government governs the grant of permits to vehicles under the framework of registrations/permits created by the Central Government and also creates licenses for operation of such permits.
• Exception – Rent a Motor Cab/Rent a Motorcycle Schemes – License created by center and granted by state. ROLE OF THE CENTRAL GOVERNMENT
Usage of Framework for Motor Vehicles Insurance for Requirements International for Motor Travel Vehicles Creation of Creation of Categories of Tribunals to Registrations address to and Permits claims under for Vehicles the Act
Creation of Definition and Framework for Central Structuring of Regulation of Government Offences Motor Vehicles under the Act ROLE OF THE STATE GOVERNMENT
Creation and Grant of Implementation of Registrations and License and Permits created Permit by the Central Conditions, Government including fares
Creation of Framework for Control of Road Licenses to be Transport within granted to the State Transport Businesses
Implementation and Enforcement of Laws Created State Taxation of Motor Vehicles by Central Government Government KEY CONCEPTS UNDER THE MOTOR VEHICLES ACT, 1988
A product of WRI Ross Center for Sustainable Cities in association with Zehn KEY CONCEPTS UNDER THE ACT
• It is important to fully understand the scope and applicability of the Act to determine the best way forward for businesses (tech or non – tech oriented) that aim to provide or facilitate transportation services.
• The Act clearly lays out definitions for kinds of vehicles and their intended uses along with specific forms of registrations/permits to be granted to vehicles, which in turn, are used for licensing purposes by states.
• Important to remember that licensing of operators changes state to state under relevant schemes as it is the generally the role of the state to determine the licensing of operators.
• The Act also lays down specific requirements to be fulfilled under each registration/ permit. TRANSPORT AND NON - TRANSPORT VEHICLES
Vehicles under the Act are broadly classified into “Transport” and “Non - Transport” vehicles.
Transport Vehicles Non – Transport Vehicles
• Transport Vehicle includes a • Non – Transport on the other Public Service Vehicle, a goods hand relates specifically to carriage vehicle, a private personal use. service vehicle or educational institution bus. • A Non – Transport Vehicle may not be used as a Transport • A transport vehicle is a vehicle Vehicle, i.e., for a commercial used for carriage of passengers purposes. and goods.
Section 2(47) of the Act UNDERSTANDING THE DIFFERENCE
• X recently purchased a new car that he uses every day to drive himself to and from his office. The car is registered as a “white board” vehicle meant for private use. Can X pick up and drop off a passenger travelling in the same direction every day and charge him a fee to cover his fuel costs? PUBLIC AND PRIVATE SERVICE VEHICLES
Public Service Vehicle Private Service Vehicle
• A Public Service Vehicle is a Motor • A Private Service Vehicle is a motor Vehicle adapted for the use of vehicle adapted for carriage of carriage of passengers. more than 6 passengers utilized by/ on behalf of the owner for carriage • Public Service Vehicles are generally of persons for or in connection with engaged for Hire/Reward. his trade.
• Includes maxi cab, motor cab, • A Private Service Vehicle cannot be contract carriage and stage engaged for hire/reward and cannot carriage. be engaged for public purposes.
Sections 2(33) and 2(35) of the Act “Hire or reward” refers to any form of consideration paid by the passenger for his carriage. UNDERSTANDING THE DIFFERENCE
• Mr. A operates a factory on the outskirts of Bengaluru. To help workers with their daily commute to the factory, Mr. A purchases a 12 – seater vehicle to pick up and drop off his workers every day. The vehicle is registered as a transport vehicle. On the weekends to earn some extra money on the side, Mr. A uses this vehicle to pick up and drop off passengers unrelated to his factory. Is this legally permissible? MOTOR AND MAXI CABS
Motor Cab Maxi Cab
• A Motor Cab is a Motor • A Maxi Cab is a motor Vehicle constructed/ vehicle constructed/ adapted to carry not more adapted to carry between 6 than 6 passengers – 12 passengers. excluding driver. • A Maxi Cab is also generally • Motor Cab is generally engaged for hire or reward. engaged for hire or reward.
Sections 2(22) and 2(25) of the Act PERMITS AND LICENSES
Permits Licenses
• A Permit is granted by a state • A Operator’s License is not the or regional transport authority same as a Permit. Licenses are permitting use of a vehicle as a granted to an operator to transport vehicle. CONDUCT A BUSINESS OR OPERATE A VEHICLE • Granted based on the INTENDED USE of a motor • Operators must still obtain vehicle permits for vehicles to be used commercially otherwise it is illegal for them to do so.
Section 2(31) of the Act CONTRACT CARRIAGE
It is a vehicle engaged under a contract by Rate may be time based or point to passenger for a fixed point. or agreed rate.
Contract Carriage refers to a motor vehicle that carries a Cannot stop to pick up/set down passenger/s for hire passengers during a or reward. Includes a journey. motor cab and maxi cab
Section 2(7) of the Act STAGE CARRIAGE
Separate Fares Fare paid either Charged to each for whole journey passenger. or stages.
Stage Carriage refers to a motor Can stop to pick vehicle that carries up/set down more than 6 passengers during passengers for a journey. hire or reward.
Section 2(40) of the Act GOODS CARRIAGE
Includes vehicles that are utilised for Goods refer to livestock or anything carriage of goods carried by a vehicle even if not other than living constructed/adapted persons. for that purpose
Goods Carriage refers to a motor vehicle Does not include that is adapted/ personal effects, constructed to carry luggage. goods.
Section 2(14) of the Act UNDERSTANDING THE DIFFERENCE
• Z owns a Swift Dzire. The vehicle has been granted a permit to operate as a contract carriage within the limits of BBMP. Z also possesses a commercial badge on his driving license. Z picks up a passenger ‘A’ near MS Ramaiah Hospital to be dropped off at Lavelle Road, Bangalore for a charge of INR 100. On the way, Z picks up passenger ‘B’ in Sadashivnagar to be dropped off at Chinnaswamy Stadium for a charge of INR 80. At Chinnaswamy Stadium, Z picks up ‘C’ to be dropped off at Bowring Club for a charge of INR 30. Is it permissible for Z to do this so long as he maintains his contract carriage permit?
• Z also utilises the vehicle to do food and grocery deliveries once in a while. Is this legally permissible? TOURIST VEHICLES
Generally used for ferrying of tourists to, from and between tourist locations and promotion of tourism within a state/country.
General objections A Tourist Vehicle is a towards using tourist form of Contract vehicles as general Carriage. taxis.
Section 2(43) of the Act MOTOR CYCLES AS CONTRACT CARRIAGES
A product of WRI Ross Center for Sustainable Cities in association with Zehn MOTOR CYCLES UNDER THE ACT
• A Motor Cycle is defined under the Act to mean a two – wheeled Motor Vehicle.
• Since Motor Cycles are included within the ambit of a Motor Vehicle, they may be classified as a Motor Cab if the intended use is commercial.
• Motor Cycles would hence qualify for grant of individual contract carriage permits.
• However, most State Governments are either reluctant or have out-right refused to grant individual contract carriage permits to Motor Cycles citing safety, security, enforcement and insurance related concerns. RENT A MOTOR CYCLE SCHEME
• The Rent a Motor Cycle Scheme, 1997 was issued by the Central Government in exercise of its powers under Section 75 of the Act.
• The Rent a Motor Cycle Scheme grants licenses to operators and further provides for the grant of contract carriage permits to motor cycles operating under a Rent a Motor Cycle License.
• These, however, cannot be utilised as bike taxis for point to point pick ups and drop offs. They are meant for an individual’s own use and must either by driven by the individual or a driver appointed by him.
Section 75 of the Act gives the Central Government the power to formulate a scheme for renting of motor cabs and motor cycles by individuals for their own use. INDIVIDUAL CONTRACT CARRIAGE PERMITS
• As stated before, there are very few states that allow for the grant of individual contract carriage permits to motor cycles.
• As of now, only Haryana has issued an order for the grant of individual contract carriage permits to motor cycles.
• Gujarat, West Bengal and Rajasthan are currently considering granting individual contract carriage permits to motor cycles.
• Other states have refused to grant individual contract carriage permits. INSURANCE REQUIREMENTS FOR MOTOR VEHICLES
A product of WRI Ross Center for Sustainable Cities in association with Zehn INSURANCE UNDER THE ACT
• The Act requires that any motor vehicle being used in a public place in India be covered by an Insurance Policy in accordance with the Act.
• The requirements specified under the Act are only the minimum requirements.
• Insurers generally distinguish between insurance coverage for private vehicles and commercial vehicles.
• Commercial Vehicles are required to obtain more comprehensive insurance coverage than private vehicles.
Chapter XI of the Act. GENERAL REQUIREMENTS FOR MOTOR VEHICLE INSURANCE • Motor Vehicles are required to obtain insurance coverage at minimum for liability for death, bodily harm, harm to goods, injury to third parties, damage to property of a third party.
• However, the Act requires Commercial Vehicles to also obtain coverage for death or bodily injuries to passengers in addition to the above.
• Insurance coverage for commercial vehicles may also include insurance coverage for workman’s compensation. PEER TO PEER RIDESHARING
A product of WRI Ross Center for Sustainable Cities in association with Zehn WHAT IS PEER TO PEER RIDESHARING?
• The concept of sharing a vehicle permitted solely for private use for a trip by splitting travel costs such as fuel and toll is known as ridesharing.
• Passengers are generally picked up and dropped off on the way depending on routes and schedules.
• In essence, is the commercial utilisation of a transportation asset, whether commercially licensed or otherwise. IS PEER TO PEER RIDESHARING LEGAL IN INDIA?
• Under existing laws, Peer to Peer Ridesharing is unregulated and hence deemed illegal in India.
• Transport authorities generally view it as a violation of the permit granted to a vehicle since it is a private vehicle being utilised for commercial purposes without having obtained requisite permissions from the transport authorities.
• Other than a violation of permits, State Governments as well as the Central Government are reluctant to provide legitimacy to the idea since it poses an enforcement issue.
• Another concern is a drastic alteration to insurance requirements. Since private vehicles do not possess the same insurance coverage that a commercial vehicle does, harm to passengers is a major concern. USING CONTRACT CARRIAGES FOR RIDESHARING
• While it would make sense that a commercially licensed contract carriage vehicle be permitted to conduct ridesharing, transport authorities are unwilling to permit the same.
• This stems mostly from the fact that this would be a violation of a contract carriage permit.
• The contract carriage permit does not allow a contract carriage to pick up and drop off passengers along the way. Contract carriages cannot engage several different contracts at the same time.
• This would, in the eyes of transport authorities, mean that contract carriages are acting as stage carriages – hence being a violation of the permit granted to it. COULD THE REGULATORY ENVIRONMENT CHANGE?
• Governments are slowly waking up to environmental, congestion and traffic concerns plaguing cities in India.
• Now, if ever, is the best time to push for Governments to seriously consider allowing peer to peer ridesharing as a means of combating environmental, health, infrastructure and traffic concerns.
• In fact, a change in mindset could take place, in view of the Motor Vehicles (Amendment) Bill, 2016, recently introduced in Parliament.
• The Bill specifically allows state governments to formulate policies that help in reduction of traffic congestion, increasing last mile connectivity, improvement of urban transport, promotion of energy conservation and better utilisation of transport assets.
• This could give impetus to the Ridesharing cause and could be utilised to make a serious push with State Governments to study, trial and permit peer to peer ridesharing in India. THANKS! Any questions?
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