An electric vehicle sits in a bay at a charging station operated by Energy Efficiency Services Ltd. (EESL), a joint venture between four state-run power companies – NTPC Ltd., Power Grid Corp., Power Finance Corp. and REC Ltd., in New Delhi, India. (Photo by T. Narayan/Bloomberg)
On January 24th, 2022 the Delhi government published a draft Motor Vehicles Aggregator Scheme (Scheme). Cab aggregators, quick commerce, and other delivery and passenger transport services in New Delhi are required to incorporate Electric Vehicles (EV) into their fleets and to cap surge pricing at set tariffs, among other requirements.
Regulation of such aggregators has been a source of contention for some state governments, with disagreements concerning surge pricing, licensing, and female passenger safety. The new aggregator plan is intended to align aggregators with the Delhi government’s Electric Vehicles Policy, 2020. The Delhi government had introduced the Delhi Electric Vehicle Policy in August 2020 with the goal of accelerating the transition to battery electric vehicles to a point where they account for 25% (twenty five percent) of the total new vehicle registrations by 2024.
The scheme applies to aggregators and their integrated vehicles that operate in New Delhi with more than 50 (fifty) two, three, or four-wheeler vehicles (excluding buses). Additionally, these entities would need to be incorporated under the Companies Act, the Cooperative Societies Act, or the Limited Partnerships Act, and maintain a registered office in India. Aggregators are defined in the scheme as “any person or entity that owns, operates, or manages a digital or electronic facility or a web platform that connects a passenger with a driver for the purpose of transportation, or that connects a driver offering to deliver/pick up a product, package, or parcel from a seller, e-commerce entity, or consignor“.
Licensing and Registration Requirements
Aggregators will be required to obtain a licence from the transportation department that will be good for one year. Within 3 months of the scheme’s enactment, on-boarded drivers and their vehicles will also be required to register on a portal to be established by the transportation department. While the driver’s licence, car registration number, and public service vehicle badge number (if applicable) would all be necessary, the scheme emphasises that a driver and their vehicle can be registered or connected with numerous aggregators.
Push for EV Fleet Conversion
Additionally, the document establishes timetables for aggregators to induct EVs after receiving their aggregator licence. The scheme also states that for aggregators operating a bike-hailing or bike-sharing service, all new cars must be electric, and all existing vehicles must be electric within 2 years. Aggregators who fail to meet these targets face suspension of their licences or a fine, or both, from the Transport department.
The aggregator is required to induct new vehicles as follows:
1.For commercial two-wheelers, as well as commercial and passenger three-wheelers:
- 10% to be inducted as EVs after 6 months of obtaining an aggregator licence;
- 25% to be inducted as EVs within 1 year of obtaining the licence; and
- 50% to be inducted as EVs after 2 years of obtaining the licence.
2. For four-wheelers, which include passenger and commercial vehicles, the aims are as follows:
- 5% to be converted to electric cars within 6 months;
- 10% to be converted to electric vehicles within 1 year; and
- 25% to be converted to electric vehicles within 2 years.
Establishment of a Command & Control Centre (CCC)
Aggregators will be required to establish a CCC in the National Capital Territory of Delhi which shall operate during the hours when the aggregator’s services are available.
- These will be required to function 24 hours a day, seven days a week for organisations offering passenger services;
- Will be able to continuously track the movements of drivers and vehicles; and
- Will have access to information about the origin-destination, route, and status of the panic button for any journey available through the aggregator’s app.
- The CCC will make data on complaints lodged by drivers or customers available to the transportation department.
- Data on the number of vehicles in operation, other state vehicles providing services in Delhi, journeys taken from Delhi, and additional analytics shall be available and sent to the transport department as and when requested in a prescribed format.
Compliances to Ensure Passenger Safety
- Cooperation with law enforcement: Cooperation should be offered in the event that law enforcement conducts an inquiry into an incident of the compromise of rider safety as a result of a driver’s act or omission during a journey.
- Ensure the GPS in the vehicle is operational: Aggregators will be responsible for ensuring that the GPS in a car used for ‘on-demand passenger transportation’ is operational for efficiently resolving GPS-related issues.
- Ensure designated route is followed: The passenger and driver should be notified via the mobile app if the vehicle deviates from the assigned path.
- Confirmation of the driver’s identification: Aggregators must verify or confirm the driver’s identity by verification or confirmation by the rider.
- Appropriate action to be taken, if more than 15% complaints per month: The aggregator shall take appropriate action against any driver who receives complaints on 15% or more of the rides they take in a month. Additionally, the aggregator must preserve or collect the data referred to herein, for a period of 3 months following the date of service.
- Ratings less than 3.5 for a year: The aggregator is responsible for the remedial training of the drivers, and ensuring corrective steps are taken. The driver’s performance is to be reviewed by the aggregator and the transport department for 3 months, at which point the transport department may cancel their Public Service Vehicle if no progress is made.
- Surge pricing ceiling: The scheme specifies that surge pricing cannot exceed twice the basic fare determined by the transportation department from time to time.
The Delhi government’s transport department would be able to punish, cancel, and forfeit the bank deposits of non-compliant aggregators. The scheme establishes the following sanctions and disciplinary actions:
- Failure to apply for a licence or disclose driver information: An aggregator will be fined Rs. 25,000 per vehicle if they do not apply for a licence or report their drivers and vehicles within 3 months of announcement of the regulation. This fine increases to Rs 500 per day, per vehicle, after the 100th day of non-compliance.
- Non-compliance with EV targets: An aggregator faces a daily fee of Rs. 1,000 per vehicle if it fails to meet the target of electric vehicles on schedule. The scheme specifies that the number of vehicles will be limited to those that meet the aim.
Violations of the scheme or any other rules of the transport department may result in an aggregator’s licence being revoked or suspended. This determination will be made following an investigation or hearing by the aggregator but may be challenged to a competent body designated by the transport department. Any bank deposit made will also be forfeited in the event of licence revocation.
India has established itself as a worldwide leader in the electric car business, with several local players currently offering electric vehicle products. EV adoption can be seen across a range of vehicle classes and business sectors. While the Delhi government has implemented significant policy changes, manufacturers have worked to remove barriers through innovation, and consumers have demonstrated their readiness and willingness to accept this change, India still needs to expand supply-side initiatives, including domestic manufacturing of electric vehicles and components. To make this possible, policies must be accompanied with budget proposals that include support for local production in the EV industry as well.
Ashima Obhan is a partner at Obhan and Associates. Samridhi Poddar is an associate at Obhan and Associates.