If you often use cab services like Ola or Uber, your travel cost may soon rise, especially during busy traffic hours. The central government has introduced new guidelines under which these cab companies can now charge up to double the base fare during peak time. Earlier, the limit was 1.5 times the base fare.
These changes come under the Motor Vehicle Aggregator Guidelines 2025, issued by the Ministry of Road Transport and Highways. State governments now have 3 months to adopt and implement these rules.
Key Changes That Will Affect Riders and Drivers
1. Higher Fare During Busy Hours
Cab companies can now charge up to 2x fare during peak hours, when traffic or customer demand is high.
During non-peak hours, companies must charge at least 50% of the base fare, ensuring minimum income for drivers even during low-demand times.
2. Penalty for Ride Cancellations
If a driver cancels a ride without a valid reason after accepting it, they will have to pay a fine of up to 10% of the fare, capped at ₹100.
The same rule applies to passengers. If a passenger cancels the ride without reason, they will also be fined similarly.
3. Mandatory Insurance for Drivers
Cab aggregators like Ola and Uber must now ensure every onboard driver has:
- ₹5 lakh health insurance
- ₹10 lakh term insurance
This is aimed at securing the lives and well-being of drivers, many of whom work long hours with limited benefits.
4. Driver Income Share and Payment Rules
According to the new rules:
- Drivers must receive at least 80% of the base fare.
- The remaining 20% can be taken by the aggregator company as a service charge.
- Drivers can be paid daily, weekly, or fortnightly, based on their agreement with the platform.
5. New Safety Measures for Passenger Security
To improve safety for passengers, several new steps have been made mandatory:
- Every cab must have a Vehicle Location and Tracking Device (VLTD) installed.
- These devices should stay active at all times and send live data to the company’s control center.
- The control center should also be linked with the state government’s Command and Control Centre to track vehicles.
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Further, drivers must follow the exact route shown in the app. If they go off route, the system will automatically alert the control room, which will then contact both the driver and the passenger for safety.
The app should also allow passengers to verify the driver’s identity to ensure that the person driving is the same one registered and police-verified by the company.
Final Words
These new rules aim to bring more structure, safety, and fairness to the app-based cab industry. While some passengers may find the fare hikes hard on their pockets, the government believes it will balance driver welfare, service quality, and passenger safety.
The next three months will be crucial, as state governments begin to adopt and apply these changes. Passengers and drivers should stay updated through their ride apps for exact implementation dates.
Disclaimer: This article is for informational purposes only and based on the latest official updates. Readers are advised to check with official transport or ride service sources for further clarification.
