Bike taxis slam brakes in K’taka; Meesho’s flipback nod

Ride-hailing apps halted bike-taxi operations in Karnataka from Monday, as the high court-imposed ban came into effect. This and more in today’s ETtech Top 5.

Also in the letter:
■ Sebi on startup Esop rules
■ Meta’s new India head
■ Windsurf founder on India

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In a major setback for cab aggregators and gig workers, bike taxis went off the roads across Karnataka after the High Court-imposed ban took effect on Monday.

Driving the news: Following the suspension, Rapido and Uber began promoting ‘bike parcel’ options on their apps – a workaround that effectively continued passenger transport.

• Ola has removed the bike taxi option entirely.
• In a message on its app, Rapido stated that it believes bike taxis will play a vital role in urban mobility and plans to engage with state authorities on the matter.
• Uber said it has “taken the difficult decision to suspend bike taxi operations” in Karnataka.

Commuters’ nightmare: For many daily users navigating congested city streets, bike taxis offered speed, affordability and last-mile connectivity. With two-wheelers now banned, frustrated commuters took to social media to share their anger.

“Thanks to the #biketaxi ban, I had to take an auto. Give me walkable shortest paths to the bus stops and bike lanes, please. This is no way to create cities,” said a user on X. Another called out Bengaluru’s roads for being hostile to pedestrians.

Gig workers hit: Bengaluru-based Namma Bike Taxi Association has written to Karnataka chief minister Siddaramaiah, requesting urgent intervention citing that over 1 lakh gig workers across the state have been impacted.

Also Read: Bike taxis: Karnataka in no mood to relent on its stand, say sources


Timeline:

• In 2021, the Karnataka government issued an order restricting bike taxi services. The companies challenged it in the high court and secured interim relief.
• In April 2025, a single-judge bench banned bike taxis until the state government frames rules under Section 93 of the Motor Vehicles Act, 1988. Aggregators were given six weeks to wind down operations.
• The relief was later extended till June 15. On Friday, the high court refused to stay the ban despite appeals from both companies and gig worker associations.

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Vidit Aatrey, CEO, Meesho

The Bengaluru bench of the national company law tribunal (NCLT) has approved Meesho’s proposal to demerge its Indian entities from its US-based parent, marking a key milestone in the company’s plan to shift domicile to India.

More details:

• The ecommerce company is expected to incur a tax outgo of $280–300 million in the US as part of the move, sources told us.
• ET had first reported last week that Meesho’s reverse flip was in its final stages, with the company preparing to file a draft red herring prospectus ahead of its planned initial public offering (IPO).
• "This step aligns our corporate structure with our day-to-day business footprint,” a Meesho spokesperson said.

Current state:

• Meesho filed for NCLT approval in January, around the time it closed a $550 million funding round from new investors including Tiger Global, Mars Growth Capital, and Think Investments.
• Several other Y Combinator-backed startups are also making similar moves. Groww has filed draft papers with the Securities and Exchange Board of India (Sebi) for a $700 million to $1 billion IPO, while Razorpay completed its reverse flip in May.

Tax paid by Indian startups to flip back:

• PhonePe (2022): $1 billion
• Meesho (2025): $280-300 million
• Groww (2024): $160 million
• Razorpay (2025): $150 million

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The Sebi board will meet on June 18 to discuss new rules that could allow startup founders to retain their employee stock options (Esops) even after the company goes public, sources told us.

Changing the mandate: Current regulations require founders to be classified as promoters when filing for an IPO. As a result, they are barred from receiving Esops.

• The market regulator believes the rules are unclear on whether founders, once categorised as promoters post-IPO, can exercise previously granted options—vested or unvested.
• Sebi is also considering a mandatory one-year cooling-off period between the grant of Esops and an IPO filing.
• It argues that awarding share-based benefits shortly before IPO filing leaves room for potential misuse.

Tell me more: Founders often take Esops instead of cash salaries in the early stages to maintain skin in the game. However, as startups raise external capital, their equity stakes get diluted.

Also Read: There’s an Esop fable in Startup Inc’s IPO run

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Meta Platforms has named Arun Srinivas as its new managing director and head for India, the company announced on Monday.

Tell me more: Srinivas will assume his new role from July 1, 2025, and will continue to report to Sandhya Devanathan. Last month, Devanathan was given an additional mandate to lead Meta’s Southeast Asia business, alongside India.

Previous stint:

• Since 2022, Srinivas has served as director and head of Meta India’s ads business.
• He led strategy and revenue growth across key focus areas, including AI, Reels, and Messaging.
• Before joining Meta, he worked at Ola as chief operating officer and global chief marketing officer. He exited the company in 2020, a year after coming on board.

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Anshul Ramachandran, founding team member, Windsurf

The narrative that artificial intelligence (AI) will replace software developers is being overhyped by some players keen to drive model sales, Anshul Ramachandran, founding team member at AI coding platform Windsurf, said in an exclusive interview with ET.

In the driver’s seat: While AI will assist with more work in the future, humans will remain in control, Ramachandran said. Tools like Windsurf, which reduce the amount of human intervention needed, could be seen as a threat.

In practice, however, it's been the opposite, with people seeing it as an opportunity to have more business, Ramachandran said, before adding, “The coming years will bring ten times more software, and the subsequent need for 'engineering 101' and investments in the workforce.”

India scope: India has become Windsurf’s second-largest market after the US, both in terms of developer adoption and enterprise partnerships, Ramachandran said. The country is home to nearly 17 million developers, and Windsurf now plans to expand operations and set up GPU clusters locally, he added.

Also Read: ChatGPT maker OpenAI reaches agreement to buy startup Windsurf for $3 billion