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Observing that the Maharashtra city taxi rules discriminated between the black-and-yellow cabs and mobile app-based services, the Bombay High Court on Thursday asked the state government to be "more rational" to allow fair competition.

A division bench of Justices R M Sawant and Sadhana Jadhav made this observation while hearing petitions filed by Uber India Ltd, Ola Ltd and six drivers plying cabs with these two companies challenging the Maharashtra city taxi rules implemented this year.

"On a plain reading of the rules we found you (the government) are trying to discriminate between the 'kali peeli' (black-and-yellow) taxis and these private cab service providers," Justice Savant said. "There seems to be a clear discrimination on several points wherein the black-and-yellow taxis are given benefit. You treat everyone on par. Make it more rational. Let there be fair competition," Justice Savant said.

The court noted that in the United States of America and a city like London, the app-based services ply on the same rates. "In London and America, there are regular cabs and Uber cabs plying on the same fares. Maharashtra should also do something like that and be a trend-setter for other states in India."

Additional government pleader G W Mattos sought time to file an affidavit in the matter and said the committee set up by the government to look into the aspect of fare structure fixation has still not submitted its report.

"Till we file the affidavit the government will not take any coercive steps in furtherance of rules," Mattos said. The court accepted the statement and posted the matter for further hearing on September 15. The petitioners submitted that the rules were arbitrary and bad in law.

"According to the rules, app-based taxis will not be allowed to ply within Mumbai Metropolitan Region on a national tourist permit. The drivers will have to obtain local permits and will not be allowed to ply on their national tourist permits," the drivers had said in their petition. "Obtaining local permits will cost private taxi drivers and owners ten times more than what it costs the drivers of black-and-yellow taxis," they contended.