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Make In India should not become Break In India

“Make In India” should not become “Break In India”

The recent spat between the taxi service companies has drawn my attention. As someone who closely watch the startups, businesses, stock markets and government policies, I found it important to share my opinion on the subject.

This war has gone to the courts and even is visible in blogs of the Ola, Uber and Meru. The companies have been openly calling names and talking about each other. The heat is unlikely to calm down. The battle can be seen between the desi Ola & Meru Vs Videsi Uber with the local companies claiming that Uber is not following the regulations where as Uber countered them questioning.  

“What makes Uber ‘foreign’? The fact that we are established in San Francisco but have a hyperlocal team solving problems that are locally relevant? ” Uber’s Bhavik asks this in a blogpost. He goes further and adds “In the affidavit submitted by our competition, they have not commented on the regulations and are silent on the subject matter of the petition. However, they have chosen the Hon’ble Court as an avenue to level false allegations while not taking a stand on whether it supports or objects to these regulations.”.

To counter this, Meru has hit back at Uber by doing a time travel analysis of how “Uber demonstrated their deepest respect for Indian laws time and again” in their blog. The 6 points given by Meru talks about the mandatory 2 factor authentication on credit card payments, Uber’s non payment of service taxes, using the non CNG vehicles in its fleets which is against Supreme Court order, even using the All India Tourist Taxi Permit cabs for point to point travel within city and surge price among other.

As per the Meru blog, this is the strategy of Uber globally- ” First break the law – then use billions of dollars of funding to kill the competition through unrealistic and predatory pricing to consumers and massive incentives to drivers – then if regulators react to any violation of laws, create huge social media campaigns using the consumer base created though subsidized pricing to put pressure on regulators to change the laws.”

I could not find a counter from Uber in their blog yet but the old post said “It’s equally important that we work together with the government to help meet legitimate regulatory requirements that will support the future of mobility.” This indicates somehow that Uber would like to have some of the rules changed.   

Meru also mentioned in the blog, “Our intent is whatever regulations are on the books — good, bad, ugly — they have to be complied with …if regulation is a bad regulation, we change the regulation. But what is on books has to be enforced.” This seems to me as a reasonable argument for a level playing ground.

Make in India may not necessarily mean producing in India, it also mean providing services and jobs in India which the cab service companies are doing. The essence of the scheme is also that businesses should “Make For India”. And hence the companies, whether Indian or not, should make for India- provide service and products, give tax, give employment and of course generate profit for themselves.   

It has been observed world over that many big corporations have built empire breaking or twisting the law first, using them and funds to kill the competition and then project themselves as “white collar” organizations. Now, I have not gone through the regulation in deep but if what is claimed by Meru is correct to a certain extent, this can be deemed as an alarm bell for the startup ecosystem as well as the Make In India campaign by the Govt. of India.

This issue should definitely not taken as Indian Vs Foreign companies as that would hurt the investment sentiments but it should be looked upon as level playing field. Inspired by the Modi Govt’s startup policies and the many Flipkarts, Snapdeals, PayTms and Olas for that matter, India is witnessing an unprecedented growth in the startups and investments. And the trend is headed Northwards. As per a startup series PITCHERS by TVF Play “Yahan 3 mein se 2 cubicles mein startup founders hi baithe hain” which holds true in some sense. But allowing startups/businesses, be it local, multinational or foreign, to make a mockery of the rules may hit the aspirations of thousands or may be lacs of entrepreneurs who would dare to take the road less traveled.

And this is not about one company or industry, this is also about the whole business sentiments. Indulging in bad practice would be bad for everyone. If breaking of the rules is not checked by authorities and government, it would increase the monopoly of some businesses which in turn will be an unhealthy sign for the business environment.    

Business practice issue like this can be linked to what has happened in the telecom sector few years back. The sector was growing at the speed of light, like the taxi business is now. Later after Radia Tapes controversy popped up, we saw how some foreign players quit the country and local players too faced the music. This also affected the small share holders badly. Although most startup in India are not listed, they may do so at a later stage and a sound and healthy business is key for generating wealth for shareholders and creating a brand.

Sooner or later, government or company scams/practices get unearthed. There should be no need to get into the stage. Apart from solving issues, startup are generating lot of jobs, many of which are on the lower end of the career pyramid. When a company takes hit, so do the livelihood of hundreds of families associated with them.

Moreover, the policies should also be made which not only help companies but the self employed too. Quoting from the Meru blog, “It is an irony that finally a multibillion dollar corporation has been allowed to go scot free and continues to use thousands of diesel cars on Delhi road, while poor auto and local taxi drivers have to live with the additional burden of higher CNG kit cost.”

Lets hope we have “Swach Business Practices” in Indian business and startup ecosystem. Let us also hope we have healthier business environment in India.  

 

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