The Supreme Court has directed the government to fast-track the legislation to govern ride-sharing services as their popularity grows.

In its full-text verdict released recently, the top court said the ride-sharing services have been providing employment to many drivers and have created a direct relationship with customers.

The top court directive comes five years after the February 2020 Patan High Court order to regulate the services.

The government included the service in the Industrial Enterprises Act but failed to enact a law to govern the sector.

According to the full text, ride-sharing services are rapidly becoming a potential alternative to public transit. Consumers value easy availability, time efficiency and accessibility of the service.

As young people are well versed in new technologies, they are the most regular consumers of the services. When ride-hailing—or ride-sharing—apps emerged in 2017, they spurred a veritable revolution in mobility.

In February last year, the government amended the Industrial Enterprises Act 2020, recognising ride business as service-oriented, giving them legal status after seven years of operation in Nepal.

“As the Industrial Enterprises Act has already given ride-sharing service an industry status, prohibiting it will not be justifying and against the industrial law.

“Despite saying no to ride-sharing business, it needs to be managed. Make transportation services inclusive for women and differently-abled people. There is a need to establish safety standards,” the text reads.

On February 11, 2019, advocate Shyam Kumar Shrestha filed a writ in the Supreme Court demanding to revoke the registration of Pathao Nepal.

Subsequently, on February 27, the court refused to issue a stay order to stop the ride-sharing services Pathao Nepal Pvt Ltd, in Kathmandu.

On June 27, the Supreme Court revoked the writ.

The full text of the judgment delivered by then-chief justice Bishwambhar Prasad Shrestha and Justice Tek Prasad Dhungana was released recently.

The text said that ride-sharing services bring foreign investors and create jobs in Nepal.

According to the text, the Department of Transportation Management, the defendant, informed the court that the federal Motor Vehicles and Transport Management Act amendments are in the drafting stage.

Similarly, the Industry Department has written that if Pathao Nepal, a ride-sharing company, fails to abide by the conditions, it will be penalised as per the Industrial Entreprises Act.

The top court then ordered the government to fast-track the process of enacting laws to address the ride-sharing transport business.

After the government gave legal status to ride-sharing services in February, the government started to draft the guidelines.

But ten months have passed, and the ride-hailing guidelines appear nowhere.

The Bagmati provincial Ministry of Labour, Employment and Transport has formed a committee to further study the ride-hailing guidelines.

Balram Niraula, secretary at the ministry, recently told the Post: “We sent the guidelines to the Bagmati provincial cabinet in mid-May, but it returned the draft in mid-June asking us for further study and clarity. We have formed a committee and are studying the matter accordingly.”

There are some legal issues, he said.

The Transport Management Act of the federal government prohibits using private number plate vehicles for public transport and states that they should be used for what they were registered for.

The draft draws from the provincial government Act that provides private vehicles for public use with special permission from the government.

The provincial cabinet has sought clarity on the confusion between the two legal provisions.

Niraula said the study committee is working on this. Once the committee prepares the report, further work will proceed.

He said the cabinet has pointed out the need to clarify software verification, among others.

“We planned to introduce the guidelines, and Gandaki also did it. But the province rolled back its decision, following protest from public transporters, and now it has been stranded.”

In July, public transport operators in Gandaki staged protests after the provincial government proposed new guidelines to legalise ride-hailing services.

The operators halted public transport services in Pokhara, objecting to the guidelines that permit vehicles with red number plates (private) to transport passengers.

Sajilo, edrive, and inDrive, among others, are providing ride-sharing services through mobile apps. There are several cargo service providers, too.

The controversy of ride-sharing companies flared after the 61st annual report of the Auditor General flagged that ride-hailing platforms are using private number vehicles as public vehicles, and they are not registered with the Department of Transportation Management to provide such services. It also flagged that the ride-sharing companies were not paying taxes.

The Motor Vehicles and Transport Management Act 1993 mentions that vehicles registered for private use should not be used for public transport.

The government was in a fix in collecting taxes from the companies which were not registered.