The verdict was related to a case that can be traced back to 2017, when a division bench of the top court had ruled that drivers without a transport endorsement on their licence can ply commercial vehicles of up to 7,500 kg in unladen weight. This was challenged by insurance companies, which said the decision put the safety of people at risk.
The matter was subsequently referred to the court’s Constitution Bench, which delivered a 126-page judgment last week.
“Nearly 70% of the commercial (passenger vehicle) drivers simply hold an LMV (light motor vehicle) licence without the transport endorsement…if the Supreme Court’s decision went the other way, it would have been a nightmare,” a senior executive at a ride-hailing platform told ET.
Executives at fleet operators and ride-hailing platforms also said that insurance claims would have become difficult for drivers had the verdict gone the other way.
“On the basis of this technicality that LMV holders must have a transport endorsement to operate commercial cabs, insurance companies wanted to not settle claims with accident victims…,” said an executive of a Mumbai-based fleet operator. “This was a major stress factor among our drivers.”
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The Supreme Court judgment noted that “for licensing purposes, LMVs and transport vehicles are not entirely separate classes. An overlap exists between the two. The special eligibility requirements will, however, continue to apply for, inter alia, e-carts, e-rickshaws, and vehicles carrying hazardous goods”.The court dismissed the arguments put up by insurance companies over the safety issues arising from drivers with a valid licence but without a transport endorsement for operating taxis.
“Our present interpretation on how the licensing regime is to operate for drivers under the statutory scheme is unlikely to compromise the road safety concerns,” the judgment said. “This will also effectively address the livelihood issues for drivers operating transport vehicles (who clock maximum hours behind the wheels), in legally operating transport vehicles (below 7,500 kg), with their LMV driving licence.”
In August last year, ET had reported that fleet operators and driver unions had sought relief from the Supreme Court, raising concerns over how the matter affected the livelihoods of cab drivers.
Supply side significance
A top executive at a fleet operator firm, which lists its vehicles on Uber and Ola, said lack of clarity on this issue was causing anxiety among drivers.
“Getting a transport licence is highly inconvenient and complex for drivers…it has to be renewed every five years and one can only get it after holding a non-transport licence for a minimum of two years,” the person said.
This assumes significance when the online ride-hailing industry is dealing with shortage of drivers.
In an interview with ET in September, Prabhjeet Singh, president of South Asia and India region for Uber, had said that the ride-hailing industry in India does not have enough vehicles to meet fast-growing consumer demand.
“We’re fulfilling less than the total demand that we have on the platform because we still have fewer cars on the platform than would be required to fulfil the demand,” he had said.
