Synopsis : The Centre has allowed cab aggregators like Ola and Uber to charge up to 2x the base fare during peak hours under the new Motor Vehicle Aggregator Guidelines 2025. The guidelines also mandate clear insurance, cancellation penalties, and stricter passenger safety norms to ensure balanced growth in urban mobility.
The Ministry of Road Transport and Highways (MoRTH) has officially greenlit cab aggregators, including Ola, Uber, and Rapido, to levy surge pricing of up to twice the base fare during peak hours, increasing from the earlier limit of 1.5x. During non-peak hours, fares cannot fall below 50% of the notified base fare, ensuring stability for drivers and aggregators while offering price flexibility aligned with demand.
In a push to enforce accountability, MoRTH has introduced a penalty where a 10% cancellation charge, capped at ?100, will apply if either the driver or passenger cancels a ride without a valid reason after booking. This aims to reduce unnecessary cancellations that impact both riders and drivers.
The guidelines, effective under the Motor Vehicle Aggregator Guidelines (MVAG) 2025, require states to adopt these norms within three months. They also specify that drivers must have health insurance of at least ?5 lakh and term insurance of ?10 lakh. States will notify base fares for each vehicle category, including bike taxis and auto-rickshaws, bringing uniformity across regions.
Under the revised structure, drivers will receive at least 80% of the applicable fare, with the aggregator allowed to retain the remainder as an apportioned fee, ensuring a fair revenue share while retaining operational sustainability for platforms.
For passenger safety, cab aggregators must install vehicle location tracking devices linked to the state’s integrated control room and ensure drivers follow app-designated routes, with deviations triggering alerts to control rooms for immediate intervention. The identity of drivers will also be re-verified at the time of ride commencement to ensure the same driver onboarded by the aggregator and verified by police is undertaking the trip, reinforcing passenger security.
The updated guidelines mark a structured approach to regulating India’s evolving urban transport landscape while prioritising fair fares, driver welfare, and enhanced safety for passengers.
Disclaimer : This article is for informational purposes only and does not constitute legal or professional advice. Please verify with official notifications before making operational or investment decisions.
