Federal and Provincial Governments Clash Over Ride-Sharing Laws

Pokhara. The federal government and the Gandaki provincial government have clashed over ride-sharing laws. While the provincial government had already issued regulations, the federal government has made arrangements related to ride-sharing through the economic regulations for the upcoming fiscal year (2083/084). The provincial government has also set the fare for ride-sharing vehicles along with the regulations.

The provincial government has stated that the process of registering apps has now begun. In the provincial government's regulations, two-wheeled vehicles are allowed to have red plates, while the federal government has made it mandatory for two-wheeled vehicles to have black plates. This is the main issue where the provincial and federal laws conflict.

Regarding four-wheeled vehicles, the province has also amended its regulations to have black plates. In the first regulation issued in 2080, it was mentioned that both four and two-wheeled vehicles would have red plates. However, due to federal government obstruction and protests from transport entrepreneurs, the provincial government was forced to back down from that provision. Not only that, but the implementation of the regulations was delayed by 1 year. The regulation passed by the Council of Ministers meeting on Baisakh 22 has been amended to have black plates for four-wheeled vehicles.

Less than a month after the province passed the regulations, the federal government's economic act has made black plates mandatory for all fare-based vehicles. With this, motorcycles with red number plates will not be allowed to do ride-sharing.

From this time onwards, a provision has been made to register two-wheeled vehicles as fare-based vehicles. There is a provision in the Transport Vehicles Act, 2049, to issue black number plates to vehicles registered in this manner. A provision has also been made for two-wheeled vehicles registered in this way to pay annual income tax.

This tax has been set at 3,000 rupees this time. Currently, ride-sharing services are being provided by motorcycles and scooters with red number plates. With this government rule, such ride-sharers will now have to be registered with black number plates. Similarly, the government has also made a provision for a 5 percent tax on every transaction received from ride-sharing.

Gandaki Chief Minister Surendraraj Pandey states that the provincial regulation will be implemented, even though the federal government's economic act conflicts with his own regulations. 'Whatever is provided in our provincial regulation, we will implement it. We brought the regulation before the federal economic act,' he said. 'The economic act is an annual law. Now we have made our regulations according to our laws. We will proceed according to the provisions in our regulations.'

He commented that the federal government, by making black plates mandatory, has not understood the spirit of the regulation, which was issued with the objective of preventing youth migration. It is his argument that the federal government has made black plates mandatory without understanding the practical difficulties.

'This will directly affect all the part-time job doing youths who are in ride-sharing,' said Chief Minister Pandey. 'Our goal is for them to be able to make a living through part-time jobs. Our objective is for them to earn income and not have thoughts of migrating. Making it black plates can cause problems.'

The provincial government has also set the fare rates. The determined fare rates include different charges for four-wheeled and two-wheeled vehicles. Furthermore, the rates differ between petrol and electric vehicles. The regulations mandate that both types of vehicles must provide concessions to passengers.

The initial fare for four-wheeled petrol vehicles has been set at 60 rupees. After that, it is 48.5 rupees per kilometer. The initial fare for two-wheeled vehicles has been set at 30 rupees. After that, it is fixed at 16.85 rupees per kilometer. For both types of vehicles, it is mandatory to provide a 10 percent discount for petrol vehicles and a 15 percent discount for electric vehicles.

Director of the Department of Transport Management, Maniram Bhusal, states that the provision regarding fare-based two-wheeled vehicles mentioned in the budget will be discussed in the ministry after it arrives and then implemented. He stated that if a decision is made by the federal government, the province should also amend its legal provisions accordingly to avoid conflict.

The federal government has made a provision for ride-sharing operators to collect VAT at a rate of 5 percent from vehicles providing services or transport services. When ride-sharing operators pay amounts to individuals providing services through their platform, they must deduct 1 percent advance tax. The responsibility of determining and collecting this tax has been assigned to the ride-sharing platform operators themselves.