Nearly one lakh daily users face disruption; hundreds of drivers who bought cars on loans fear financial distress as the Administration tightens its grip on aggregators
CHANDIGARH: Chandigarh’s experiment with regulating app-based taxi services has turned into a full-fledged public transport crisis, with all four major ride-hailing platforms—Uber, Ola, inDrive and Rapido—now barred from operating in the city.
The latest action came on September 8 when the State Transport Authority (STA) suspended the licences of Uber India Systems Pvt Ltd and Rapido for six months. The move followed similar action against Ola in June and inDrive in August. As a result, none of the four major app-based cab platforms that had been serving Chandigarh commuters is currently licensed to operate in the Union Territory.
The immediate impact is being felt not only by commuters but also by drivers who invested heavily in vehicles after building their livelihoods around these platforms.
According to estimates reported from Chandigarh, nearly one lakh people depend on app-based cab services every day. For many, particularly office employees, students, senior citizens, women travelling alone and people commuting between Chandigarh, Mohali and Panchkula, app-based taxis had become an essential part of the city's transport system rather than a luxury.
A crackdown that has removed every major platform
The sequence of action has unfolded over three months.
The STA suspended the licence of Ola, operated by ANI Technologies, on June 17 for six months. The licence of inDrive, operated by Indsystems IT Pvt Ltd, was suspended on August 10. On September 8, Uber and Rapido were also suspended for six months.
The orders have been issued under Rule 17 of the Chandigarh Administration Motor Vehicles Aggregators Rules, 2025, which empowers the licensing authority to suspend an aggregator for non-compliance.
The Administration says the companies were given repeated notices and opportunities to comply with the rules but failed to satisfactorily address deficiencies.
Among the issues cited are driver insurance, health and term insurance, training, fare compliance, vehicle eligibility and other operational requirements. In Uber's case, the authorities also raised objections to its subscription/recharge model for drivers and the attachment of non-commercial vehicles to the platform.
The Administration has also alleged that the notified fare structure was not being followed.
But who pays the price?
While regulatory compliance is the responsibility of the aggregators, the question being increasingly raised is: what happens to the thousands of drivers who depend upon these platforms for their livelihood?
A large number of drivers purchased cars through bank and finance-company loans specifically to work as app-based taxi drivers. They now face monthly instalments, insurance, maintenance and other vehicle-related expenses without any assurance of regular income.
For a driver who has borrowed several lakh rupees to purchase a commercial vehicle, the suspension of an aggregator's licence is not simply a business inconvenience. It can immediately become a question of whether he will be able to pay his EMI.
Drivers have also complained in recent months about fare structures, commissions and the terms imposed by aggregators. The regulatory dispute therefore has two sides: the Administration wants aggregators to comply with its rules, while drivers want a system in which they can continue earning enough to sustain their vehicles and families.
The prolonged confrontation has already included protests by driver organisations. The Chandigarh Tricity Driver Union and Jai Durga Auto-rickshaw Welfare Association have been protesting for nearly 100 days, including a 16-day hunger strike, according to reports.
Chandigarh has a transport problem bigger than the taxi dispute
The crisis has exposed a larger weakness in Chandigarh's public transport infrastructure.
Chandigarh has a population of roughly 13 lakh but a vehicle population of around 15 lakh. Yet the city does not have a mass rapid transit system, while public bus services alone are unable to absorb the demand generated by residents, workers and daily commuters from the surrounding Tricity.
For years, app-based taxis filled this gap.
A commuter travelling from Sector 40 to the IT Park, a student travelling from Chandigarh to a college in Mohali, an employee travelling to Panchkula, or a passenger heading to the railway station or airport could book a vehicle within minutes.
The sudden disappearance of these services therefore creates a problem that cannot be solved simply by telling passengers to use traditional taxis or auto-rickshaws.
Bharat Taxi becomes the only major option
With the four major platforms suspended, Bharat Taxi, operated by Sahkari Taxi Cooperative Limited, has emerged as the only major app-based platform still functioning in Chandigarh.
But whether one platform can immediately absorb the enormous demand previously handled by Uber, Ola, inDrive and Rapido remains a major question.
The shortage could result in longer waiting times, higher effective fares, fewer vehicles during peak hours and difficulties for commuters during late-night or early-morning travel.
There is also the possibility of an expanding informal market, with drivers and passengers attempting to arrange rides directly through telephone numbers or messaging applications.
Indeed, a day after the latest suspension, reports indicated that some Uber and Rapido drivers continued accepting bookings through alternative methods, while authorities began challaning vehicles found operating in violation of the suspension orders.
That creates another dilemma: a regulatory action intended to bring order to the sector could inadvertently push part of the market outside the regulated app-based system.
The real issue: regulation versus livelihood
There is little argument that app-based taxi companies should comply with safety, insurance, fare and licensing requirements.
Passengers have a legitimate right to expect properly insured vehicles, trained drivers, transparent fares and mechanisms to address complaints.
But the Chandigarh Administration's challenge is to enforce these requirements without creating a transport vacuum.
A six-month suspension may punish an aggregator, but its consequences extend much further—to passengers, drivers, vehicle financiers and the wider economy.
For drivers who have purchased vehicles on loans, six months can be financially devastating. A car does not stop generating expenses merely because an app stops providing rides.
The Administration therefore faces pressure to find a mechanism under which regulatory deficiencies can be rectified quickly while protecting the livelihood of drivers and ensuring that commuters are not stranded.
The bigger question
The Chandigarh taxi controversy is no longer merely a dispute between the government and private aggregators.
It has become a test of how a modern city regulates the gig economy while maintaining essential urban mobility.
The Administration has made it clear that app-based transport companies cannot operate outside the rules. The companies, meanwhile, face the prospect of losing access to one of the country's most vehicle-intensive urban markets.
But ultimately, the people caught between the two sides are the one lakh daily commuters and thousands of drivers whose livelihoods depend on these services.
Unless a regulatory solution is found quickly, Chandigarh could face a peculiar situation: a city with more vehicles than people, but increasingly fewer legal options for getting from one place to another.
The immediate need is therefore not merely to decide who is right in the regulatory dispute. It is to create a workable transition—one that enforces safety and fare rules, protects drivers who have invested in vehicles, and prevents commuters from becoming collateral damage.