Nepal Transport Operators Revive Syndicate, Force Government to Suspend Ride-Sharing Rules

KATHMANDU: Seven years after the KP Sharma Oli-led government proudly declared the end of the syndicate system in Nepal’s public transport sector, transport operators have successfully revived the practice, pressuring the government into submission. Following late-night discussions on Monday, a joint task force comprising government officials and pro-syndicate transport operators agreed to suspend the recently introduced ride-sharing regulations in Gandaki Province. The task force decided that the Ministry of Physical Infrastructure and Transport will inform the Prime Minister’s Office, which will then formally request the Gandaki government to suspend the rules.

Despite the agreement with the federal government, the Nepal Transport Operators’ National Federation has refused to immediately call off its nationwide transport strike. Federation President Vijay Bahadur Swanr stated that the strike would only be lifted after Gandaki Province officially suspends the ride-sharing regulations. “The suspension agreement will be fast-tracked to the provincial government, and transport services will resume only after the suspension is announced,” Swanr said.

The Gandaki Province regulation, enacted under a 2019 provincial law, allowed private vehicles (four-wheelers and two-wheelers with red license plates) to operate as public transport, enabling ride-sharing services. In protest, transport operators began a strike in Gandaki on Friday, which escalated into a nationwide shutdown of public transport services starting Monday. The strike disrupted short, medium, and long-distance routes, leaving passengers—especially the elderly, children, women, and the sick—stranded and suffering on the streets.

The Oli government had initially banned the syndicate system on April 17, 2018, by prohibiting the registration and renewal of transport committees under the District Administration Office, treating them as NGOs. However, the same government, still under Oli’s leadership, has now capitulated to the operators’ demands, drawing criticism for its inability to enforce the earlier decision.

Nepal’s Essential Services Operation Act, 1957, classifies public transport as an essential service, prohibiting strikes under Section 3(1). Section 4 of the Act stipulates penalties for participating in such strikes, including up to six months in prison, a fine of NPR 200, or both. Despite the strike continuing for four days, the Home Administration has taken no legal action against the operators.

Transport expert Ashish Gajurel condemned the strike, calling it an abuse of power by operators. “Public transport is an essential service used by many for emergencies, work, or school. Shutting it down to harm passengers is nothing but bullying by operators,” he said. Former Deputy Inspector General Keshav Adhikari, who previously led the Traffic Division, echoed this sentiment, arguing that banning ride-sharing services, which provide affordable and efficient transport, is unjust. “This is outright syndication. Operators are trying to monopolize the sector, but new digital platforms have the right to serve customers in this digital age,” Adhikari said.

The Supreme Court of Nepal has repeatedly ruled against syndicates, issuing orders in 2004, 2010, and 2016 to eliminate such practices. In December 2016, Justices Anand Mohan Bhattarai and Anil Kumar Sinha issued a writ mandating the government to dismantle all remnants of the syndicate system and foster a competitive environment in the transport sector. Despite these rulings, the operators’ actions have gone unchecked.

Federation President Swanr defended the strike, claiming the transport sector has been in disarray since the syndicate was dismantled. “Only a few vehicles are registered under the Company Registrar’s Office. Most are individually owned, not under company names, which creates irregularities. Vehicles should be registered under companies,” he said, noting that only 8-10 companies currently operate vehicles under their names.

A 2023 report by a Transport Reform Task Force, led by former Secretary Sharad Chandra Paudel, recommended allowing transport committees to renew their registrations for five years until July 16, 2029, to facilitate a transition to a company-based system. The report, submitted to the Ministry of Physical Infrastructure and Transport on January 31, 2024, via the Department of Transport Management, highlighted that the abrupt halt in renewals had frozen committee assets, disrupting private-sector transport management.

It suggested lifting the ban on such organizations until 2028/29, allowing asset transfers to companies, and amending the Organization Registration Act, 1977, to automatically dissolve transport committees by July 16, 2029. The report also proposed that all public transport operators transition to a company model within five years, with clear guidelines for registration, operation, and regulation.