Kathmandu, November 20

The Department of Transport Management today declared ride-sharing services such as Tootle and Pathao illegal, indicating that the government’s commitment to promote entrepreneurship and innovation was merely limited to words.

The DoTM has threatened to initiate legal action if the service providers continue to use private motorbikes for transporting passengers. DoTM stated that the two ride-sharing services had been violating the law.

DoTM Director and Spokesperson Tirtha Raj Khanal said, “We are simply implementing the law and it is the responsibility of everyone to comply with existing laws.”

In today’s statement, the department said vehicles registered for private use could not be used for transporting passengers.

As per Section 8 of the Motor Vehicles and Transport Management Act, vehicles registered for private purpose cannot be used as means of public transportation.

Meanwhile, Sixit Bhatta, co-founder of Tootle, claimed that the ride-sharing services complement the constitutional provision of free mobility. “But instead of promulgating contextual laws, the government seems hell bent on putting us out of business.”

According to Khanal, however, the department has decided to ban ride-sharing services considering the rising number of complaints from users. “We felt the need to formulate necessary policies before the situation got out of hand,” he told THT.

While agreeing that regulations are necessary, Bhatta said, “The government should refrain from choking innovation in the name of regulating any sector.”

The department had issued a similar statement against the two ride-sharing services on January 16 as well. However, it was forced to backtrack on the decision after Prime Minister KP Sharma Oli said innovative services such as ride-sharing should be encouraged.

Registered riders of ride-sharing services are also up in arms against the government’s decision. “By registering with a ride-sharing service provider, my earnings more than tripled compared to the income from my earlier nine-to-five job at a private company,” said Sabin Rokka, requesting the names of the companies be withheld. “If the government does not withdraw its decision to ban ride-sharing services, we will take to the streets.”

While the issue of ride-sharing services evading taxes has also come up time and again, Bhatta pointed at the lack of policies for the same.

According to the Inland Revenue Department, Tootle owes the government Rs 33.9 million and Pathao has outstanding dues of nearly Rs 2.5 million. The IRD has come up with the amount based on the income tax and value added tax that companies need to pay from fiscals 2016-17 to 2018-19.