In the bustling streets of Kathmandu and beyond, ride-hailing services have become an integral part of daily life for many Nepalis. However, the future of these popular services hangs in the balance as regulatory efforts face continued delays and complications.
A Long Road to Recognition
It’s been seven years since ride-hailing services first appeared in Nepal, revolutionizing urban transportation. Finally, on February 1st of this year, the government amended the Industrial Enterprises Act 2020 to officially recognize ride-hailing as a service-oriented business. This long-awaited move gave the industry legal status and seemed to pave the way for comprehensive regulation.
Regulatory Roadblocks
Despite initial progress, the path to regulation has hit several speed bumps:
- Guidelines in Limbo: Six months after drafting guidelines for the industry, they remain unenacted.
- Provincial Complications: The Bagmati Province cabinet returned the draft guidelines in mid-June, citing the need for further study and clarity.
- Legal Contradictions: A key issue is the conflict between federal and provincial laws regarding the use of private vehicles for public transport.
- Software Verification: The provincial cabinet has raised concerns about the process of verifying ride-hailing software.
The Gandaki Precedent
Adding to the uncertainty, Gandaki Province’s attempt to introduce similar guidelines was met with protests from public transport operators, forcing a rollback of the decision. This setback has further complicated the regulatory landscape.
Industry Frustrations
Ride-hailing companies express growing frustration with the regulatory limbo:
- Asheem Man Singh Basnyat, managing director of Pathao Nepal, criticizes the government’s lack of understanding of innovative, tech-based businesses.
- Industry insiders warn that the lack of clear regulations allows some services to operate without proper safeguards, potentially risking user safety.
The Economic Impact
Despite the regulatory challenges, ride-hailing services continue to make a significant economic impact:
- Pathao alone reports 150,000 registered riders and drivers, with over 60,000 earning regular incomes through the platform.
- The company facilitates approximately 76,000 daily rides across various vehicle types.
- Pathao has expanded to 20 cities and employs over 200 full-time staff.
Looking Ahead
As the government grapples with the complexities of regulating this innovative sector, the future of ride-hailing in Nepal remains uncertain. The outcome of this regulatory process will have far-reaching implications for urban mobility, employment, and the broader tech ecosystem in the country.
For now, Nepali commuters continue to rely on these services, even as the apps that connect them to their rides operate in a legal grey area. As the committee formed by the Ministry of Labour, Employment and Transport in Bagmati Province continues its study, all eyes are on the government to see if it can strike a balance between innovation and regulation.
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