The Ministry of Road Transport and Highways has announced new guidelines for app-based cab aggregators such as Ola, Uber, and Rapido, allowing these platforms to charge extra fares during high-demand periods. The guidelines are part of the government’s efforts to regulate the operations of ride-hailing services, ensuring balanced benefits for both passengers and drivers.
Under the revised framework, cab aggregators are now permitted to implement dynamic or surge pricing. However, this surge pricing must remain within limits prescribed by the respective state governments. For instance, fares may rise during peak hours, weekends, or festival seasons when demand for rides is higher than usual. The government has clarified that the move is intended to provide flexibility for the market while maintaining reasonable protection for consumers.
The guidelines also set base fare structures, with recommendations that the minimum fare should not be lower than the rates fixed for city taxis by each state. Moreover, the new policy emphasizes that total fare calculations must be transparent and shown to the user before confirming the booking. This ensures passengers are fully informed about any additional charges, including surge pricing, service fees, and taxeOne of the key objectives of the new policy is to address the complaints of cab drivers, many of whom have raised concerns about low earnings and high commission cuts by aggregator companies. The guidelines recommend that drivers receive at least 80 percent of the total fare, while the aggregator platforms may retain up to 20 percent as commission. This aims to promote fair compensation for drivers and reduce disputes between them and the platforms.
The policy further includes important safety provisions. Aggregators are required to conduct background verification of drivers, ensure vehicles meet fitness standards, and provide an emergency response system through the app. A mechanism to handle user complaints within a fixed time frame is also mandated to enhance accountability.
Digital payment options must remain available for all rides, and users should receive e-receipts for transactions. The government also insists on data transparency, requiring cab aggregators to share anonymized trip data with authorities upon request, to support transport planning and enforcement.
State governments have been given the responsibility to oversee the enforcement of these guidelines and to notify specific fare caps applicable in their regions. The guidelines are advisory in nature, but states are expected to incorporate them into their regulatory frameworks to ensure uniformity across the sector.
The new policy marks a significant shift in the regulation of the rapidly growing ride-hailing industry in India. While it aims to support innovation and digital growth, it also seeks to protect the interests of consumers and service providers. Passengers can expect more clarity in pricing, while drivers may benefit from better earnings under the regulated fare structure.
