Union government issues new rules for Ola, Uber on peak-hour pricing and ride cancellation. States must adopt the new guidelines within three months.
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NEW DELHI: On 1 July 2025, the Union government issued new rules for Ola, Uber, regarding the pricing on the peak-hour and charges for the cancellation of ride without specified reason for driver as well as the passenger.
States have been advised to to adopt revised guidelines within three months from the date of issue of the guideline.
On 1 July 2025, Ministry of Road Transport & Highways has release Motor Vehicles Aggregator Guidelines for Ola, Uber, Rapido on surg pricing. The aim is to establish a regulatory framework for the aggregators in order to ensure the responsibility of their operation.
Both aggregator and driver have to comply on the guidelines. These guidelines lay down rules for pricing, eligibility for drivers, responsibilities on part of the aggregators with respect to safety, among others.
Regulation of Fare
The fare for the respective category or class of motor vehicles shall be the base fare chargeable to passengers availing services from the aggregator.
The base fare chargeable shall be for a minimum of three (3) kilometers to compensate for dead mileage including the distance traveled without a passenger and the distance traveled and fuel utilized for picking up the passengers.
Aggregators may offer fares at up to 50% below the base fare and can apply dynamic pricing up to twice the base fare (as defined in sub-clause 17.1).
For vehicles owned by drivers, at least 80% of the fare (including all driver-related costs) must go to the driver. The remaining amount may be retained by the aggregator. Payment should be settled daily, weekly, or fortnightly as per mutual agreement.
For vehicles owned by the aggregator, the driver must receive at least 60% of the fare.
In any other arrangement, payment terms will be as per the agreement between the driver and aggregator.
In states where fares are not fixed by the government, the aggregator may notify a base fare to the State Government, which shall be applicable until officially revised. The State Government will also fix fares for other permitted vehicle categories.
Passengers cannot be charged for empty vehicle travel, except when the pickup distance is under 3 km. Fare is calculated only from the pickup point to the drop-off location.
Penalty for Cancellation of Rides
If the ride is canceled after accepting the journey on app, without any specified reason, a fee of 10% of the fare not exceeding Rs. 100 shall be imposed on the driver.
Same is applied to the passenger if canceled from the side of passenger.
The government said the aggregator shall ensure a minimum amount of Rs 5 Lakh as insurance for passengers.
Customer Data
Aggregators must ensure that all customer data collected through the app is stored on servers located within India for a period ranging from a minimum of 3 months to a maximum of 24 months. This data must be made available to the state government as per legal procedures. Additionally, customer data cannot be disclosed without the customer’s written consent.
The guidelines also mandate transparency in the aggregator’s operations. This includes:
- Disclosure of the app’s algorithm functioning,
- The driver’s share of the fare,
- Incentives provided to drivers,
- Charges levied on drivers,
- And any other information as specified by the state government.
All such information must be published on the aggregator’s website and mobile app.
READ FULL GUIDELINE HERE
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