Cowboyish attitude of startups launching services sans proper verifications needs to be stopped

The alleged rape incident involving a driver contracted to Uber has brought more than one thing to light. It is a fact is that many foreign and Indian startups are brazenly flouting multiple rules introduced by the Indian government. And if it continues like this, the growth story of the startup ecosystem will go in the reverse gear very soon.

What I feel is that the government needs to come down heavily on the defaulters with exemplary penalties, so that we do not see another such incident in future.

Follow the law of the land

In my opinion, the cowboyish attitude of launching services without adequate permissions or verifications is a dampener. We, too, have invested in a web-based cab booking company, which holds license to operate in Mumbai. As per the rules, we need to convert black and yellow cabs to radio cabs under the brand name The transport department in the city has given us a set of some 15-16 documents to verify the background of our drivers. Also, when we enrol a driver we also do verification on our own. So, we have the drivers' addresses and voter's IDs. I think that this level of verification is required at the least, because customer safety is the most important thing here. If you don't get it right, nothing will work.

How rules are being flouted?

Many drivers today have got national permit. But they do point-to-point services, which are not allowed. That's one area where we think the authorities need to crack the whip. A driver with a national permit is supposed to be driving the car outside the city, not within the city limits.

Impact on investment

There will certainly be some short-term impact. However, I don't think this will continue for long. There is enough opportunity in the country. There are demographic dividend, consumption story, new government, political stability etc. And there is risk appetite, too.

Government needs to wake up

Unfortunately, the space is still virgin in the country and there hardly any regulation. I don't think our regulatory system is equipped to take that leap of faith. Till a few weeks ago, the officials had no clue on what Uber was. At the end of the day, you go to talk to the transport department officials. You cannot stop somebody from launching an app in the country, especially if it provides livelihood to many. But, at the end of the day, there has to be a regulatory mechanism built around the entire service space, which is missing here.

What should these companies do if and once back in service?

I think it is all about ensuring that there is driver accountability by any means -- whether it is regulatory or non-regulatory.

What is the future?

The next round of serious wealth creation will come from the technology-enabled space on the back of increasing mobile and internet penetration. It will continue like this for now. There is definitely a huge demand for goods and services, especially in Tier 2 and Tier 3 cities, on the back of lack of formal logistics infrastructure. For somebody, who is leveraging internet and the mobile space, efficiency is essential to make deep in roads into the market. So, this decade is for the internet and mobile guys.

(Girish Shivani is a director of YourNest Angel Fund. As told to's Delhi correspondent Priyanka Sahay)

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