Sudden Shutdown Leaves Thousands of Drivers Jobless
Indian electric cab company BluSmart, a rising competitor to Uber, suspended its services on Thursday. The move came just two days after India’s market regulator accused co-founder Anmol Jaggi of diverting company funds, including money meant for electric vehicle procurement, to buy a luxury apartment.
The sudden halt in operations has affected the livelihoods of thousands of BluSmart drivers. With a fleet of over 8,000 electric taxis, the company had built a strong presence in cities like New Delhi, Mumbai, and Bengaluru. BluSmart also invested in charging hubs to support its all-electric fleet, aiming to challenge fuel-based rivals such as Uber and Ola.
In an e-mail to customers, BluSmart said, “We’ve decided to temporarily close bookings on the BluSmart app,” but gave no explanation for the suspension. The company added that it would begin processing refunds within 90 days if services were not resumed by then.
Allegations of Fund Diversion and Governance Failures
The Securities and Exchange Board of India (SEBI) has barred Jaggi and his brother Puneet from participating in the stock market and has launched a forensic probe into Gensol, a listed solar energy firm linked to the duo. Gensol previously procured electric vehicles that were leased to BluSmart.
SEBI’s order revealed major governance issues within Gensol. It alleged that loans intended for electric vehicle purchases were diverted through complex transactions to fund personal expenses. These included the $5 million purchase of a high-end apartment in The Camellias, one of India’s most exclusive residential complexes. Other alleged misuses included personal expenditures and a $30,379 payment believed to be for a golf set.
BluSmart and Jaggi have not commented publicly on the issue. Gensol has said it will comply with SEBI’s directives. Gensol’s shares have plummeted 85% since the beginning of the year.
Customers and Drivers Left in Limbo
BluSmart was known for its reliable and clean services, especially for airport transfers. Unlike Uber, its drivers were not allowed to cancel rides, making it a favourite among travellers. On Thursday, the Delhi Airport issued an advisory announcing BluSmart’s suspension.
The abrupt shutdown has severely impacted drivers. Mohammed Akhlakh, a 32-year-old driver from New Delhi, said he was told to park his vehicle at a company hub late Wednesday night. “I was asked to hand over the keys and not come to work,” said Akhlakh, who supports his elderly parents, wife, and two children on a monthly income of roughly $400.
Concerns have also surfaced on social media, with users reporting that funds in their BluSmart wallets have been blocked. The company’s assurance of refunds within 90 days has done little to ease growing customer frustration.
As BluSmart’s future remains uncertain, its shutdown highlights the vulnerability of workers and customers dependent on startups, especially when regulatory issues arise.
with inputs from Reuters
