The government has permitted ride-hailing services like Ola and Uber to set their fares at up to double the base rate during peak times, an increase from the previous limit of 1.5 times, and not to go below 50 per cent during off-peak hours. This change is part of the newly introduced Motor Vehicle Aggregator Guidelines (MVAG) 2025.
The Transport Ministry has approved a penalty of 10 percent of the fare, capped at Rs 100, to be charged to drivers if a ride is cancelled without a valid reason. A similar fee will also apply to passengers for cancelling their rides.
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The states have been advised by the central government to adopt the revised guidelines within three months of the date of issuance. They are also allowed to include provisions in addition to the ones already specified in the revised norms.
The Transport Ministry addressed the regulation of fares, saying, "the fare by the State Government for the respective category or class of motor vehicles, shall be the base fare chargeable to passengers availing services from the aggregator", under sub-clause 17.1 of the guidelines.
"The base fare chargeable shall be for a minimum of three (3) kilometers to compensate for dead mileage, including the distance travelled without a passenger and the distance travelled and fuel utilized for picking up the passenger(s)," it added.
The government also said that the aggregator is allowed to set a minimum fare that is at least 50 per cent lower than the base fare. Additionally, the aggregator can implement dynamic pricing that may reach up to two times the base fare outlined in sub-clause (17.1) above.
The guidelines also mentioned that the aggregator can charge the fare only from the point of origin of the journey to the destination where the passenger is dropped off. Furthermore, the aggregators shall ensure a minimum amount of Rs 5 lakh for the insurance of the passengers.
