Indian states ban VC-backed taxi apps following rape case
India's state governments have been instructed to ban all unregistered web-based taxi booking services - impacting VC-backed start-ups like Ola and TaxiforSure - following a rape involving a driver contracted by US-based Uber.
Dehli was the first state to impose the ban and has since been followed by Maharashtra, Uttar Pradesh, Karnataka, Chandigarh and Telangana.
The controversy began after it emerged that the driver - who is accused of raping a 26-year-old woman in Gurgoan on December 5 after she ordered a taxi through Uber - was previously charged for rape but was allowed to work after obtaining a forged reference from a police officer.
In a speech to the Indian parliament's upper house on Tuesday, Home Minister Rajnath Singh said Delhi police are exploring the legal liability of Uber - to whose service the suspect's car was registered - and that the company had been banned from operating in state.
"The Ministry of Home Affairs has advised the state governments and UT (union territory) administrations to ensure that the operations of web-based taxi services are stopped and that such service providers which are not licensed [...] are prohibited to operate till they get themselves registered," he said.
A representative for Uber said the company had not been officially notified of any ban. It is understood that Uber - along with TaxiForSure and Ola, neither of which have publicly acknowledged any ban - continues to be in operation.
In a statement on Sunday, CEO Travis Kalanick said that Uber will work with the government to establish clear background checks currently absent in their commercial transportation licensing programs.
Meanwhile, Mumbai-headquartered service TaxiForSure released a statement emphasizing the safety of its service and the rigorous background checks it carries out with its drivers. "Before we started our endeavor to make commuting convenient for people, we wanted it to be safe," it said. "Safety of the people is the highest law for us."
Accel Partners led a $30 million Series C round of investment for Indian car rental TaxiForSure in August, while Ola raised $210 million in a Series D round of funding led by SoftBank in October. Uber received a $1.2 billion round led by Fidelity Ventures in June - the largest so far this year globally.
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