Uber, Ola, Rapido can now charge 2x of the base fare during peak hours: All you need to know
Vehicle aggregators including Uber, Ola, inDrive and Rapido have been granted headroom on surge pricing by the the Ministry of Road Transport and Highways, on 1st July. The Road Transport Ministry’s guidelines for ride-hailing services permitted them to charge up to twice the base fee, instead of the previous 1.5 times, while maintaining non-peak hour charges at a minimum 50% of the base fare.
The updated standards must be adopted by states within three months. A 10% fare penalty, to a maximum amount of Rs 100 is scheduled to be applied if a driver cancels a reservation without providing a valid explanation after accepting the trip on the app, in a new set of Motor Vehicle Aggregator Guidelines (MVAG) 2025. The aggregator and the driver will each incur the fine.
Likewise, a similar charge would be collected when an individual cancels a reservation via the application. These aggregator companies use surge pricing to control sudden spikes in demand during peak hours.
New working requirements for the drivers
The same compliance requirements that apply to other aggregator drivers must be met by all drivers onboarded for non-transport motorcycle services. These requirements include completing required 40-hour induction training programs, undergoing medical examinations, including eye tests, psychological evaluations and police background checks at least seven days before initial integration.
App usage, traffic laws, first responder training, gender sensitivity and disability awareness are all included in the training programs that all drivers must conclude, which combine in-person and online courses. Aggregators are required to guarantee that drivers possess health and term insurance worth no less than Rs 5 lakh and Rs 10 lakh for each driver, respectively with yearly increases announced by the centre.
Drivers who rate their duration of engagement with the aggregator below the five percentile of all drivers will be required to do refresher training every quarter, which is mandated annually and will not be permitted to continue using the aggregator if they don’t.
Safety and comfort of passengers
The criteria for safety and technology have been extensively reinforced. Applications need to be accessible in Hindi, English, and the official state language in cases where Hindi is not the state language. Aggregators are required to acquire cybersecurity certification from companies that CERT-In (Indian Computer Emergency Response Team) has approved and accredited.
The Digital Personal Data Protection Act of 2023 and other related laws must be followed when storing data, including trip, passenger and fare records. All aggregators must establish round-the-clock control rooms to keep an eye on vehicle movements and be in constant communication with vehicles that are on board.
The centre has directed that the aggregator make sure that vehicle locating and tracking devices (VLTDs) are put in vehicles, their feed is received and are connected to the state government’s integrated command and control centre for the sake of passenger safety.
Moreover, they have to run round-the-clock call centres that offer support in both English and the official state language. Every automobile must have active AIS 140-compliant vehicle location tracking equipment installed, as well as panic buttons that are linked to the control room of the aggregator.
Apps must have particular features for Divyangjan (people with disabilities) to comply with accessibility standards and state governments must decide how many vehicles are proportionately included in aggregator fleets that are suitable to people with disabilities.
State governments have the authority
According to the new guidelines, state governments would announce the base fare for various vehicle categories that fall under the policy’s purview, such as autorickshaws and bike taxis and are free to add clauses beyond those outlined in the updated standards. The state governments could now allow the aggregation of motorbikes that are licensed for personal use as well.
Furthermore, the incentives and fare share percentage of the drivers are to be fixed after their recommendations. States “may impose fees on the aggregator for issuance of authorisations permitting non-transport (private non-commercial) motorbikes to undertake journeys through such aggregator, on a daily, weekly, or fortnightly basis, as may be determined by their government.” The implementation of fees is a matter of discretion and states are free to choose whether or not to impose such costs.
Meanwhile, companies must disclose their base prices if the states have not notified them of the rate. Additionally, dead mileage costs won’t be imposed until the pick-up distance is less than three kilometres. The cost for the distance a driver covers to pick up a person is known as a dead mileage charge.
Only the fare from the starting point of the ride to the destination, where the passenger is dropped off, shall be levied. At least 80% of the applicable fare, including all costs under the driver’s fare, must be paid to the driver who boards the vehicle with the aggregator while the balance should be held as the latter’s appropriated fare.
According to the terms of the driver-aggregator agreement, the payment might be made every day, every week or every two weeks but not afterward. The revised guidelines highlighted, “With respect to motor vehicles owned by the aggregator the on-boarded driver shall receive at least 60 per cent of the fare applicable, including all costs specified in driver fare and the remaining charges shall be retained as the apportioned fare.”
Aggregators have to “mandatorily adhere to targets fixed for inclusion of electric vehicles in their fleet,” according to the guidelines, which introduce compulsory electric vehicle targets. State governments or the proper government agencies in charge of controlling air quality will establish these goals. On a yearly basis, they may also order aggregators to gradually raise the proportion of electric, alternative fuel or zero-emission vehicles in their fleets.
Significance of the new framework
While the decision has been met with criticism from some sections, it exemplifies the operation of a free market economy, where private companies are permitted to function. They are permitted to charge within a reasonable framework under the jurisdiction of higher authorities including state governments. Moreover, the public is not entirely reliant on these services, as public transportation offers nominal fare options.
According to reports, the goal of the government is to prevent aggregators from undercutting competition by providing steep discounts, while also guaranteeing that consumers are not burdened during times of high traffic. Along with offering reasonably priced passenger transportation, hyperlocal deliveries and the creation of job possibilities, the move is anticipated to alleviate traffic congestion and vehicle pollution.
The fresh regulations could even legalise bike-taxi services, which have long operated in murky regulatory conditions by Rapido, Ola and Uber. However, the decisions made by each state government to use this fresh authority are going to dictate how it is actually implemented.
India’s shared mobility ecosystem has undergone “rapid and significant change” since the first 2020 framework was introduced, which prompted the inclusion of the bike taxi provision in the aggregator rules. The government stated that the growing popularity of electric cars, bike-sharing and autorickshaw rides has “widened the consumer base.”
According to the government, the revised framework seeks to preserve a minimal regulatory approach while guaranteeing driver welfare, user security, and safety. Industry players, including Uber and Rapido, have welcomed the guidelines, with Uber calling them a step toward innovation and regulatory clarity, and Rapido describing the recognition of non-transport motorcycles as a milestone for affordable transport and last-mile connectivity.
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