Bengaluru: Karnataka government kept the doors open on Saturday to have talks with Ola, the local ride-hailing service provider, to avoid a ban that could help rival Uber build market share.

The Bengaluru RTO this week cancelled the Ola Cabs service for six months for flouting rules by providing bike taxi services in the city.

Bengaluru, the state capital and technology hub, is among Ola’s top three markets in India. VP Ikkeri, the state commissioner for transport and road safety, informed media that the department had seized and issued fines for approximately 258 bikes during a probe after complaints.

Ola Cabs permit was obtained in 2017 and valid till 2021 thereby enabling it to run three and four-wheeler taxis in the state.  But, Ola Cabs allegedly flouted rules by introducing bike-taxi services and were running them through an app-based service in Bruhat Bengaluru Mahanagara Palike (BBMP) limits.

Following a complaint on the same, the RTO conducted a probe and prepared a report where Ola was found to be at fault. In February, 500 bike taxis were seized for operating illegally. Ola and Rapido, a bike taxi aggregator service, was ordered to halt services.

Following this, the RTO sent a notice to the Ola Cabs on February 15, seeking an explanation as to why the company flouted rules and asked them to provide substantial reason as to why the license should not be cancelled as per section II (1) of the Karnataka on demand Transpiration Technology Aggregators Rules 2016.

Accordingly, Ola filed their explanation on March 5. The copy of Ola's statement is not available. But as per the notice served, the RTO did not find the explanation genuine and cancelled the licence of the cabs for six months.

"It could lose out badly to Uber if pushed out of the market for an extended period," said Neil Shah, partner and research director at Counterpoint Research to media. "If Uber comes up with a new strategy to take up some drivers and customers with more incentives, then it would be difficult for Ola to come back," he added.

Ikkeri also mentioned that the department had also sent a notice about penalties to the last known address of Rapido. However, the motorcycle taxi operator could not be reached for comment despite multiple attempts.