Uber, Ola ordered to halt ride-sharing services in India's Silicon Valley

Things are not chugging smoothly for Uber and its local rival Ola in India’s Silicon Valley.

Both the ride hailing firms have been directed to withdraw their ride-sharing services in the Indian state of Karnataka. The ruling comes days after the state government deemed carpooling services from the companies illegal.

The transport department of Karnataka, home to 'India’s Silicon Valley' city of Bangalore, has given the companies until Thursday to halt the aforementioned services.

The directive was issued Monday after officials from the state government along with those from Ola and Uber met to discuss the issue. The transport officials are citing an archaic regulation to prohibit UberPOOL and Ola Share from operating in the state.

“We have explained to them (Ola and Uber) and they have also agreed that what they are doing now is illegal. They will make changes,” said M.K. Aiyappa, the state transport commissioner.

A source at Ola told Mashable India that the company is currently trying to understand the matter, and is exploring different options. Ola and Uber hadn’t responded to our request for comment at the time of publication.

It’s not necessarily the end of road for carpooling services from both the companies. According to Aiyappa, the companies can file a petition and explain why their pool-services should be allowed in the state. The state government will take that into consideration.

According to Karnataka’s government, which has shown little interest in amending archaic regulations in the past, pool services violate contract carriage permit under which Uber and Ola's taxis operate. The age-old regulation restricts a cab from pickling up and dropping passengers during the course of a ride on a particular route.

The regulation in question had previously forced cab provider ZipGo to halt its operations in Bangalore in 2015. Last year, the state government had suspended the motor bike services from Uber and Ola citing similar regulations, mere days after the companies had launched its services.