Despite strong growth, bike-taxi market faces legitimacy issues

Vijay C Roy

Chandigarh, March 29

Despite registering a growth of over 20 per cent CAGR (compound annual growth rate), the bike-taxi industry faces legitimacy challenge due to the absence of a uniform nationwide policy.

According to data, as of September 2023, 21 states, including Haryana, Punjab, Andhra Pradesh and Uttar Pradesh, and UTs of Chandigarh and Delhi have recognised bike taxis and permitted them to operate either through a dedicated bike-taxi policy or under the aggregator policy or through a special government notification.

While many states are yet to come up with regulations, states like Kerala and Maharashtra have banned the operations. In Tamil Nadu and Karnataka, the respective high courts have stayed the ban, according to a study by KPMG.

According to data, leading bike-taxi operators have done exceedingly well since their introduction in 2015-16, driven by ever-increasing demand. It is estimated that in 2023, the bike-taxi industry completed 318 million rides compared to 281 million rides in 2022.

Bike taxis are not new to India. The first use case of commercial two-wheelers can be traced back to 1981 in Goa, where it became a popular mode of transportation among the tourists. The state was the first to provide legitimacy to bike taxis and issued permits to motorcycles to operate as commercial vehicles. However, it was not until 2015-16, when various online aggregator start-ups stepped in to streamline and expand access to end users at the push of a button, what was hitherto a fragmented and unorganised play. As many as 40 aggregators were estimated to have started operations during that period, but recently the industry has seen consolidation.