Two days after issuing a ban on the cab-hailing company for a period of 6 months for running bike taxis without permission, the Karnataka government revoked it on Sunday.

Priyank Kharge, the Minister for Social Welfare, Karnataka, on Sunday tweeted, "@Olacabs will run their business as usual from today. However there is an urgent need for policies to catch-up with new technologies & also industries too should work closer with Govt to help evolve policies for innovations."

Earlier on 18 March, the Karnataka Transport Department issued an order saying, "As Ani Technologies Pvt. Ltd. (Ola Cabs), Bangalore, has violated the Karnataka On-demand Transport Technology Aggregators Rules, 2016, and in the backdrop of the report submitted by the Deputy Transport Commissioner and senior Regional Transport Officer, Bangalore (South), the aggregator licence issued to it till June 19, 2021 has been suspended for 6 months under the rules."

The department implied that the license issued to Ola Cabs was that for app-based tax service (motor cabs) and not bike taxis.

Reports suggest that the decision was taken by the transport department without consulting the IT ministry and the state government. The department is yet to upgrade its regulations to include bike taxi services.

Bengaluru being a major market for Ola Cabs, the stakeholders including Matrix Partners India, an investor appreciated quick resolution of the issue by the State Government.