In India, cab rides through apps like Uber, Ola, and Rapido may soon become more expensive during peak hours, following new guidelines issued by the central government under the Motor Vehicle Aggregator Guidelines (MVAG) 2025. The updated policy, released on July 1 by the Ministry of Road Transport and Highways, allows fares up to twice the base rate during busy periods.
The Government of India has revised the fare regulations for ride-hailing platforms, allowing cab aggregators such as Uber, Ola, and Rapido to charge up to twice the base fare during peak hours under the newly released Motor Vehicle Aggregator Guidelines (MVAG) 2025.
Issued by the Ministry of Road Transport and Highways, the guidelines aim to introduce standard fare structures, improved safety, and better insurance coverage for drivers. The policy also restricts fare discounts during non-peak hours to no less than 50% of the base rate, up from previous limits of 1.5x charges during busy times.
The changes come at a time when states like Delhi and Maharashtra are enforcing strict bans on older fuel-based vehicles to combat pollution. This, combined with the fare revision, is expected to increase the overall cost of travel for millions of daily commuters.
Under the MVAG 2025:
- Ride cancellations by drivers without valid reasons will incur a 10% penalty, capped at ₹100.
- Dead mileage charges (fees for the distance traveled to pick up passengers) will be waived if the pick-up is within 3 km.
- Cab aggregators must provide drivers with health insurance of at least ₹5 lakh and term insurance of ₹10 lakh.
- State governments must adopt these guidelines within three months, as they hold the authority to finalize fare structures and incentive models for drivers.
- If state-specific fare policies are not declared, the ride-hailing companies are required to publish their own base fare transparently.
The new framework has also brought relief to bike taxi operators such as Rapido and Uber, who have long operated in regulatory uncertainty—particularly in Karnataka, where a recent ban had caused operational challenges and protests.
A Rapido spokesperson noted the potential of these reforms to create legal clarity and expand affordable mobility across cities.
Uber called the move “a forward-looking step” toward clarity and innovation. “Timely adoption by states will be key to ensuring uniform implementation and building much-needed predictability for all stakeholders,” an Uber representative stated.
As India modernizes its mobility infrastructure, the implementation of MVAG 2025 is set to bring both opportunities and challenges to the ride-hailing industry, balancing commuter costs with driver welfare and legal consistency.
