Galore of Start Ups in Bangalore – Glare of Regulators

Almost every major city in India is known for something. When it comes to Bangalore (or Bengaluru), it has clearly spearheaded the startup scenario in India. One of the obvious factors for it is having access to a large pool of talent. Many other choose it because it is where all the drama is unfolding.

Start Up Ecosystem:

It is quite noteworthy to quote a recent study which showed Bangalore as the 2nd fastest growing startup ecosystem in the world. There have been about 1,700 startup companies that began their journey in Bangalore. A lot of startup related events take place in Bengaluru which make sure that a new entity is always connected to the ecosystem. Bangalore is a dream destination for business managers and entrepreneurs as the probability of landing a well-paying job or succeeding as an entrepreneur are high in an IT hub. It is one of the better-connected metropolises and we one of the safer cities in the country.

It is no wonder that most of the startups are concentrated in Bangalore which is a great blend of  talent, low cost  real estate, better access to capital with a high density of investors and mentorship support, a conducive government that announced initiatives like building one of the Asia’s biggest startup warehouse, an Internet of Things Lab, etc., with a fair amount of Incubators/Accelerators and major VCs. Bangalore already hosts many start ups and has been a witness to the event of successful start-ups like FreeCharge, Ola, Quikr , InMobi shifting their base to Bengaluru in search for good talent and low real estate cost.

Battleground:

Yet, it is also of late turning into a battleground for the clash between India’s Internet start-ups and regulators which are continually trying to wrap their heads around the new, dynamic models not covered by the outdated laws.

Amazon:

It is pertinent to note from the events that took place in the last couple of years which led Amazon to majorly cut back its operations in the state due to the Government’s action of banning many third-party sellers from working with the online marketplace. Amazon has instead set up 20 warehouses across the country, including some in neighboring states that are benefiting from jobs and tax revenues at the expense of Karnataka. It recently launched is Cloud server in Mumbai.

Uber and Ola:

As reported in the news recently, Karnataka’s state transport department has implemented the state’s On-demand Transportation Technology Aggregator Rules 2016, which requires the taxi aggregators such as Ola and Uber to immediately stop operations as they are yet to obtain relevant licenses under the new rules. The rules will require Ola and Uber to rein in their surge pricing practices, hire only those drivers who have a “working knowledge” of Kannada and have lived in the state for at least two years, along with other requirements. The government stopped the two companies from operating their bike taxis in March this year.

In a city that is not yet equipped with adequate infrastructure and has an inadequate transportation system, these moves do hurt the mobility of its citizens without providing for alternatives or particularly ensuring their safety. They also hit the livelihood of people working with the likes of Amazon and Ola such as small merchants and independent drivers.

In order to become a truly booming start up hub, the regulators have to show a lighter hand in taking such catastrophic steps which may carry deeper and long-term implications.

Read more about Ola and Uber clashes