Twice The Price? New Guidelines Let Cabs Charge More During Peak Hours; Details Inside

The updated rules aim to standardize pricing structures while offering room for flexibility based on demand. The base fare, as defined in the guidelines, will be determined by respective state govts

The Ministry of Road Transport and Highways has introduced sweeping changes to the pricing framework for cab aggregators under the newly released Motor Vehicles Aggregator Guidelines 2025. According to the revised rules, aggregators can now apply dynamic pricing up to twice the base fare during peak hours, an increase from the previous limit of 1.5 times. In contrast, during non-peak hours, fares can drop to 50 per cent below the base fare, giving passengers the benefit of reduced pricing during off-peak times.

The updated rules aim to standardize pricing structures while offering room for flexibility based on demand. The base fare, as defined in the guidelines, will be determined by respective state governments depending on the vehicle category or class. Importantly, the fare must cover a minimum of three kilometers to account for “dead mileage”—the distance covered by drivers to reach passengers and between trips without a fare.

Cancellation Charges And Driver Penalties

The guidelines also clarify cancellation policies for both passengers and drivers. If either party cancels a ride without a valid reason, a penalty of 10 per cent of the fare, capped at Rs 100, will apply. The objective is to discourage last-minute cancellations and ensure service reliability.

Mandatory Insurance And Vehicle Age Limit

The government has mandated that aggregators must provide health insurance of at least Rs 5 lakh and term insurance of Rs 10 lakh for their drivers. Additionally, only vehicles that are less than eight years old from the date of initial registration will be allowed to operate under aggregator platforms. This move is intended to maintain safety standards and improve service quality.

Licence And Grievance Redressal System

To streamline the licensing process, a centralized portal will be set up for single-window application clearance. Aggregators will be required to pay a licence fee of Rs 5 lakh, which will be valid for five years. Each aggregator must also appoint a Grievance Officer to handle user and driver complaints, reinforcing accountability within the platform.

The centre has urged all states to adopt the revised guidelines within three months, encouraging uniformity across jurisdictions.