The Central Government has introduced new rules that allow cab companies like Ola, Uber, and Rapido to charge up to twice the base fare during peak hours. Earlier, they could only charge up to 1.5 times. This means your ride could become more expensive if you’re traveling during busy times.
During non-peak hours, the fare cannot be less than 50% of the base rate.
These changes are part of the Motor Vehicle Aggregator Guidelines (MVAG) 2025, released by the Ministry of Road Transport and Highways. The new rules also come at a time when some states are banning old vehicles due to pollution concerns, which could add to travel costs.
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Key Highlights of the New Guidelines:
- Cancellation Charges: If a driver cancels a ride without a valid reason, they will be fined 10% of the fare (up to Rs 100).
- State Role: States must adopt these guidelines within 3 months and will decide the final fares.
- Base Fare: If a state doesn’t set a fare, companies must declare their base fare themselves.
- Dead Mileage: Drivers cannot charge extra (dead mileage fee) unless the pick-up point is more than 3 km away.
- Insurance for Drivers: Companies must provide:
- Rs 5 lakh health insurance
- Rs 10 lakh term insurance for drivers.
Bike taxi operators like Rapido and Uber Bike will benefit from these rules, especially in states like Karnataka, where they faced bans earlier. These new guidelines give legal clarity and support to bike taxi services.
What Companies Are Saying:
Companies like Uber and Rapido welcomed the new rules. Uber said the guidelines help promote innovation, make regulations clearer, and can help create new jobs. They also urged state governments to adopt the rules quickly for smooth implementation across India.
