Ola, Uber to now charge 2 times the fare during rush hours; Govt approves new rates

The Ministry of Road Transport and Highways has unveiled new Motor Vehicle Aggregator Guidelines (MVAG) 2025, permitting cab aggregators like Ola and Uber to charge up to twice the base fare during peak hours. This marks an increase from the previous cap of 1.5 times the base fare. Conversely, during non-rush hours, aggregators are mandated to charge no less than 50% of the base fare. States have been advised to adopt these revised guidelines within three months of their issuance, with the flexibility to include additional provisions.

The updated guidelines also introduce a penalty system for ride cancellations. A charge of 10% of the fare, not exceeding ₹100, will be imposed on a driver if a ride is cancelled without a specified valid reason after acceptance. A similar penalty will apply to passengers who cancel a booked ride without a valid reason. The base fare, which will be determined by respective state governments for different categories of vehicles, is set to cover a minimum of three kilometers to compensate for "dead mileage" – the distance and fuel used by a driver before picking up a passenger. However, passengers will not be charged for dead mileage unless the pick-up distance is less than three kilometers; fares will primarily be calculated from the passenger's pick-up to drop-off point.

Furthermore, the new guidelines mandate that aggregators ensure a minimum insurance coverage of ₹5 lakh for passengers. They also stipulate that drivers onboarded with their own vehicles should receive at least 80% of the fare, while those operating aggregator-owned vehicles should receive a minimum of 60%. The MVAG 2025 also notably permits the use of private motorcycles as taxis through aggregator platforms, subject to state approval, a move welcomed by mobility platforms like Uber and Rapido. This aims to provide regulatory clarity, reduce traffic congestion, and create livelihood opportunities in the shared mobility sector.