“Would Benefit Existing Permit Holders”

A week later the Chief Minister gave everyone a year’s grace; the next day Raj Thackeray’s son Amit said drivers caught speaking Hindi would be beaten regardless, and four cab drivers went to the Bombay High Court, which struck down the previous version of this rule in 2017 as “completely illegal”. On September 1, with the language row still on the front pages, the minimum rickshaw fare in Mumbai rose to ₹27 and the per-kilometre rate past ₹18, the second increase in nineteen months, approved after what officials called representations from the sector, some of whom said it was too small.

The newspapers treated these as two stories. They are one, and the state has already said so. Last October the transport department wrote to the Union Ministry of Road Transport and Highways asking permission to cap rickshaw permits in two dozen cities, and gave its reason in a single clause: limiting the number “would benefit existing permit holders.” Governments usually bury a regulation’s purpose under the public interest it claims to serve; this one posted the purpose to Delhi. The arrangement is nearly a century old, and to see it whole it helps to go to Texas in 1930.

Texas, 1930

That year the American railroads were losing long-haul freight to the motor truck. They did not cut rates. They asked the state legislatures for weight limits on trucks, in the name of protecting the roads, and Texas obliged with a rule capping any truck that served two or more railroad stations at seven thousand pounds. The beneficiary is legible in the wording. In 1935 Congress placed interstate trucking under the Interstate Commerce Commission, the railroads’ own regulator, to prevent “unfair or destructive competitive practices”, the 1935 phrase for charging less than the railroad. The ICC gave certificates to the truckers already on the road and thereafter received thousands of applications a year while the number of licensed carriers fell.

George Stigler put this case at the front of his 1971 paper on regulation and drew from it a rule: regulation is, as a rule, sought by the regulated industry and designed for its benefit, because a few thousand certificate holders vote as a bloc while the millions who each lose a few rupees a trip do not. And the producer never asks in his own name. The railroads petitioned for the safety of the roads, and got protection from trucks.

Mumbai, 2026

On March 9 the department issued two orders. It revoked the provisional bike-taxi licences it had granted Ola, Uber and Rapido six months earlier, and it froze new rickshaw permits across the state, in the name of congestion and clean air. The second order is the ICC certificate, the cap the October letter asked for; Pratap Sarnaik, the transport minister, told the press that rickshaw unions had requested it, as Stigler would have predicted. The first is the weight limit. The bike taxi is the cheapest motorised ride in India, and the department’s own data had found fewer than eight hundred in the whole state; in May, in the name of the safety of women, the minister had the three apps pulled from Indian phone stores for a night until the Centre had them restored.

In July came the aggregator policy, and this is the Motor Carrier Act. The Regional Transport Authority will fix base fares for app rides, and “excessive promotional discounts” will be regulated, in the name of shielding commuters from surge. The Centre’s 2020 guidelines had let an aggregator price a ride up to half below the notified fare; Maharashtra takes that away. What an app ride ever offered a Mumbaikar was a price below the meter, which the state has now defined as a destructive competitive practice, as in 2017 it told the High Court the apps’ pricing was “predatory and monopolistic”. Predatory is the regulator’s word for cheaper. Once an Uber may not undercut the stand, it is a stand with a booking screen.

The same policy makes a Maharashtra domicile and working Marathi conditions of every driver’s badge, in the name of a passenger being understood in an emergency; the minister added that the state’s youth “should have the first right to employment”. This is the clause that produced the queue at Tardeo, and Raj Thackeray explained it in 2010, when his own transport union began teaching Marathi to migrant members and he berated them for it: these people will learn Marathi, he said, and then grab jobs in Maharashtra. He was opposed to drivers passing the test. The permit was the point; the language is one more sieve on the number allowed to compete for your fare.

A week after the policy the Chief Minister flagged off Bharat Taxi at the Navi Mumbai airport, a cab app promoted by Amul and seven other cooperatives at ₹10 crore apiece and launched nationally by the Union Home Minister, in the name of ending the exploitation of drivers. The railroads never managed this: the regulator has entered the race with a car of its own. Its promise of zero commission was matched before it launched, since Uber already charges Pune’s rickshaw drivers ₹19 a day, because three companies were fighting for the same drivers. What “surge-free” means where the referee owns a club is that when it rains in Mumbai the price stays fixed and the ride does not come.

Then the meter went up. Cap the sellers, remove the substitute, forbid discounting, restrict the badge, field a house brand, raise the price: a cartel by government resolution, and the September tariff card is the first dividend paid to the permit holders the letter promised to benefit.

The wrong villain

The rickshaw driver is the easy villain and the wrong one; it is the state that made him. In November 1997 Maharashtra froze rickshaw and taxi permits. Ola was thirteen years away and Uber sixteen; there was no aggregator to protect anyone from. The freeze turned a ₹25,000 piece of paper into a scarce asset that a new driver bought from an old one at whatever price the shortage set; Delhi’s cap in the same era pushed a rickshaw from a lakh and a quarter to five lakh, the difference being the black-market value of the permission slip. Drivers borrowed against that premium. The freeze was a promise that the number of competitors would stay fixed, and they paid for it.

Then the aggregators arrived and the promise turned out to be worthless. Ola launched in India in December 2010 and Uber in 2013, both running on tourist permits, and bike taxis on no permit at all. None of them sat inside the capped system, so none of them counted against the number of competitors the driver had been guaranteed, and each undercut the man who had paid five lakh for the right to charge the meter. The state’s answer, when it came, was to open the gate: in June 2017 it lifted the freeze so that the licensed trade could expand and compete. It was too little, and six years late. Pune’s fleet went from under fifty thousand to more than a lakh and a quarter in the decade that followed, but the paper the department was now issuing freely had already lost the premium it once carried. For the commuter it was the best decade the city’s roads have had; for the man who bought his permit at the 2015 price it was expropriation, and Sarnaik was telling the truth about the EMIs. So the driver did what the railroads did and asked the state to make good on what he had paid for. He is the creditor here. The department owes him compensation for a promise it should never have made, and has chosen instead to pay him with money extracted from the millions who ride. That is the permit’s whole history: manufacture a shortage, sell it, abolish it, then re-impose it so that passengers, rather than the treasury, pay the people you cheated.

No party will represent the passenger, because each has held the desk: a Congress-NCP cabinet tried the domicile-and-Marathi condition in 2010 and retreated in a day, Fadnavis’s own government did it by circular in 2015 until the High Court struck it down, Sarnaik has now written it into the Rules, and the MNS runs the union that struck against Ola and Uber in 2018 and won fares raised by a quarter to a half. A permit costs the treasury nothing to withhold, each one withheld recruits a grateful union, and the commuter who paid ₹3 more this morning has none.

The state has shown by accident how fast competition undoes the arrangement. When the cap on the kaali-peeli, Mumbai’s black-and-yellow taxis, was lifted in 2017, RTOs that had been flooded with applications for twenty years received eighty in two months: Ola and Uber existed, so a permit was worth its ₹25,000 fee and not a rupee more. Six years of aggregators had zeroed out a premium two decades of freeze had built, and all the open counter did was put a number on it — which is precisely why the premium’s holders want competition gone. We also know what the meter alone delivers. Since April 2025 Uber’s rickshaw fare in Pune has been “indicative” and the meter decides; within days the app said ₹145, the driver said ₹170, and drivers paid by distance had rediscovered the longer way round. Bengaluru capped the app premium at five per cent of the meter and rides still ran at twice the notified rate, because a price fixed below what riders will pay moves the transaction off the screen and into the argument at the kerb. When Karnataka briefly banned app rickshaws outright, commuters told reporters they would gladly pay more for a vehicle that turned up. The passenger had already voted with the only ballot she had.

What is the RTO for?

The Interstate Commerce Commission was abolished in 1995, when Congress accepted that its certificates had protected nobody but their holders. Nobody proposed reforming it; its work was the certificates, and once they went there was nothing left. Mumbai should put the same question to the Regional Transport Office.

Strike out the tasks that exist only to serve the cartel. It decides how many rickshaws may exist, for whose benefit the letter has told us; what a ride may cost, which protects the driver’s floor and the passenger’s nothing; who may hold a badge, which Raj Thackeray explained; and it calibrates meters and licenses aggregators, which matter only because it fixes fares and forbids competition. Each is the ICC certificate under another name. What survives fits in a sentence: a public register of vehicles and drivers, compulsory insurance, a fitness inspection any accredited garage may perform, and the ordinary police and courts for drivers who harm passengers. A registry and a law need no minister.

The demand, then, is permit raj hatao and fare raj hatao together: abolish the Regional Transport Authority as a body that decides anything about supply or price, sell Bharat Taxi to anyone who will buy it, and legalise on the same morning every bike, rickshaw and car that meets the register’s standard. Uber may charge ₹80 for a ride the meter prices at ₹120, and a rickshaw driver may charge ₹200 in the rain to a passenger who agrees. A Marathi speaker earns more from the riders who want one, which is the only working-knowledge test ever reliably administered. The department will say none of this is safe. Its record on passenger protection is a rooftop “For Hire” light for kaali-peelis, meant to curb refusals, that took from 2012 to 2020 to notify because five of those years went to arguing whether the sign should be in English or Marathi.

The men who waited nine hours at Tardeo were sitting the wrong examination. A driver’s real test is set by the passenger every morning, in the act of choosing someone else, and the department has spent the year making certain there is no one else to choose, for the benefit, in its own words, of existing permit holders. Forty-five years passed before Congress let the trucks loose. Mumbai’s commuters should not give the rickshaw stand nearly so long.