India's Ride-Hailing Rules Get a Major Overhaul: What It Means for You (and Drivers!)

Image credit-The Sentinel Assam

India's Ride-Hailing Rules Get a Major Overhaul: What It Means for You (and Drivers!)

Get ready for some changes to your Ola, Uber, and Rapido rides! The Indian government has just released updated guidelines allowing cab aggregators to charge up to double the base fare during peak hours. This move, aimed at balancing user safety, driver welfare, and business operations, also introduces new minimum fares, clarifies "dead mileage" charges, and sets strict rules for cancellations.

Guwahati, Assam – July 3, 2025 – Good news (and perhaps a bit of a pinch on the wallet for some) for commuters across India! In a significant move set to reshape the ride-hailing landscape, the Ministry of Road Transport and Highways (MoRTH) has unveiled its revised Motor Vehicle Aggregator Guidelines, 2025. This comprehensive update, reported today by The Sentinel Assam, brings a slew of changes, most notably allowing popular platforms like Ola, Uber, and Rapido to implement higher surge pricing during peak hours.

Previously capped at 1.5 times the base fare, cab aggregators can now charge up to a whopping twice the base fare during periods of high demand. This change is poised to directly impact your commute costs during rush hour, but the government's intention is clear: to create a more sustainable and equitable ecosystem for all stakeholders.

Balancing the Scales: Beyond Just Surge Pricing

While the peak-hour surge is grabbing headlines, the new guidelines are far more nuanced. They introduce a floor as well as a ceiling for fares. During non-peak hours, cab companies can now charge a minimum of 50 per cent of the base fare. This "base fare" will be the amount officially notified by individual state governments for various vehicle types, ensuring a standardized approach. States have been urged to adopt these new guidelines within the next three months, so expect a staggered rollout across the country.

Understanding "Dead Mileage" and Fairer Fares

One of the key clarifications in the new rules addresses the often-debated concept of "dead mileage" – the distance and fuel a driver expends to reach your pickup point. The government has now mandated that the base fare should cover a minimum distance of 3 kilometres. This is designed to compensate drivers for their initial travel.

However, here's the crucial detail for passengers: you will not be charged separately for dead mileage unless your total ride distance is less than 3 km. For all other trips, the fare will be calculated strictly from your pickup location to your drop-off point, ensuring transparency and fairness.

A Win for Drivers? Ensuring Fair Compensation

Perhaps the most commendable aspect of these new guidelines is the focus on driver welfare. The government has laid down clear mandates for how much drivers should earn:

• For drivers who own their vehicles and are onboarded by aggregators: They are now guaranteed to receive at least 80 per cent of the total fare collected. The aggregator will retain the remaining amount. Payment settlements can be daily, weekly, or fortnightly, depending on the agreement between the driver and the company.

• For vehicles owned by the aggregator but operated by a driver: In these cases, the driver must receive at least 60 per cent of the fare collected, with the aggregator keeping the rest.

These provisions are a significant step towards ensuring that drivers, the backbone of the ride-hailing industry, receive a fairer share of the revenue.

Cracking Down on Cancellations

Tired of drivers cancelling on you at the last minute? Or perhaps you've been charged for a cancellation you didn't initiate? The new guidelines also introduce stricter rules for cancellations, impacting both drivers and passengers.

If a driver cancels a ride after accepting it without a valid reason, they will face a penalty of 10 per cent of the fare, up to a maximum of Rs 100. The same rule applies to passengers who cancel a ride without a valid reason. This aims to reduce arbitrary cancellations and improve the overall efficiency of the service.

These revised guidelines represent a thoughtful attempt by the Indian government to bring greater regulation and accountability to the burgeoning ride-hailing sector. While the increased peak-hour fares might be a point of discussion for commuters, the emphasis on driver welfare, clearer fare structures, and cancellation policies signal a more mature and balanced approach to this essential urban service. As states begin to adopt these new rules, it will be interesting to see how they reshape our daily commutes.

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