Uber and Rival Ola Apps Could be Blocked in India

Mar 25, 2015 07:31 AM EDT | Matt Mercuro

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New Delhi authorities have asked India's federal information technology ministry to block Uber's taxi-hailing apps and its rival Ola in the city to enforce a ban on both of their services, according to Reuters.

Back in December, India ordered all unregistered web-based taxi-hailing companies to stop operations and obtain an operating license after a driver contracted with Uber was accused of raping a passenger.

The ban has been ineffective so far and both Uber and Ola, which is backed by Japan's SoftBank Corp., have continued to operate as normal while their license applications are pending.

Local authorities have told both companies multiple times to stop operating if they want to have their license applications finalized. Since they won't listen, the city believes that blocking both Ola and Uber is the only way to get them to listen.

"In order to process your application further, I am directed to seek a sworn affidavit declaring therein that you are complying with the ban order imposed upon your company in letter and spirit," a state official wrote to Uber and Ola, according to The Wall Street Journal.

Transport authorities have tried to stop Uber and OLA drivers, but it's not doing much. The state department has impounded 140 vehicles so far operating as part of their taxi services.

App-based taxi companies believe India is one of our fastest growing markets, where Ola is worth approximately $8 billion to $10 billion.

Earlier this week, Uber finalized a marketing and distribution deal with India's Times Internet in an attempt to expand operations in its largest market outside the United States.

"The deal is centered around a commercial marketing arrangement accompanied by a small investment," the San Francisco-bases ride-sharing company said in a statement on Monday to Economic Times.

Eleven different cities can access Uber's services in India, including New Delhi.

Uber is valued at around $40 billion currently in its latest fundraising.

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