Karnataka has banned taxi-hailing service Ola Cabs for six months for violating government rules by running motorcycle taxis.
"Despite repeated warnings, Ola was misusing the license granted by the authorities. Bike taxis are not allowed in Karnataka according to government policy," a senior official with the state's transport department said on condition of anonymity.
"So the decision was taken to suspend its license for six months."
Several users in Bengaluru reported that they were still able to book an auto-rickshaw or taxi through Ola's app late on Friday.
Ola, backed by SoftBank Group Corp and Tencent Holdings Ltd and Uber's main rival in India, has a licence to operate taxis in the state from June 2016 to June 19, 2021, local media reported.
The company said in a statement it was evaluating all options to find an "amicable solution", and that it has been closely working with the authorities.
"Despite other companies continuing to operate illegally, we halted our bike taxi experiment weeks ago," Ola said, adding it had sought the state's cooperation to develop a legal framework for a pilot.
Rapido, another motorcycle taxi operator, operates in cities such as Karnataka's capital Bengaluru and Hyderabad. It was not clear what licence Rapido uses to operate in Karnataka. The company did not immediately respond to Reuters' request for comment.
Ola has invested $100 million in Vogo, a domestic scooter sharing start-up that provides services in Bengaluru and Hyderabad.
© Thomson Reuters 2019