New Rules for Ola, Uber : Can charge Double the Base Fare…

New Rules for Ola, Uber type Ride hailing platforms and also like rapido , inDrive introduced by the Government of India under Motor Vehicle Aggregator Guidelines (MVAG) 2025 by the Ministry of Road Transport and Highways .

Let’s summarise all important updates of the New rules in BIRDVIEW…

These New rules for Ola, Uber etc, aim to regulate :

1. Peak hours pricing ( Surge pricing)
2. Ride cancellation and penalties
3. Revenue sharing with drivers
4. Safety and insurance for passengers
5. Legality of bike taxis
6. Standardization across states

We will analyse Major updates one by one.

A. Surge Pricing New Rules for Ola, Uber ( Peak hour pricing )

Privious rule about Surge pricing:

• Ride hailing platforms are allowed to charge a maximum of 1.5 times during high demand hours.

New rule for Surge pricing:

• Aggregators now allowed to charge upto 2 times the base fare during peak hours.
• These means fare can double when demand is high like in rain, holiday, festival, rush hours.
• Off – peak discount limit : The fare can not drop below 50 % of the base fare even in low demand hours .

Why this Surge pricing rule matters:

• Brings transpancy and legitimacy to Surge pricing .
• Protects drivers by ensuring reasonable compensation during off peak hours.
• Prevent preditary Pricing tactics.

B. Minimum Fare and Distance Inclusion ( Dead Mileage) related provisions in New Rules for Ola, Uber,etc

New provisions for Minimum Fare:

• A minimum of 3 km is to be included in the base fare.
• This accounts for the “Dead Mileage” – Distance the driver travels to pick up the passenger.
• Beyond the 3 km, fare is charged based on actual Trip distance.

Significance of Minimum Fare provision:

• Prevent under payments to driver for time / distance to reach the customer.
• Encourages fairer fare estimation from the riders perspective.

C. Cancellation and penalties related provision in New rules

New cancellation charges,

• If driver cancel the ride after accepting it ( without valid reason) , they are fined 10% of The fare ( capped at ₹ 100 )
• Similarly, if the passenger cancel the rides without valid reason also face a

Exception ( No penalties if )

1. The driver refuses to go to the destination
2. Driver ask for extra money
3. Vehicle is different than listed
4. Safety concerns raised by passenger

Significance of this provision,

• Reduce last minute cancellations .
• Discourages driver/ passenger from abusing the system
• Improves ride availability and reliability.

D. Passenger safety and insurance related provisions in the New Rules of Ola , Uber etc

Mandatory safety norms required,

• All vehicles must be GPS – enabled and linked to state transport control rooms.
• All vehicles must include,

1. Panic button in Vehicle
2. Background verification for driver
3. Driver training in road safety and passenger conduct
4. App support in regional languages

Mandatory Insurance norms required are,

• Aggregators must provide a ₹ 5 lakh insurance for passengers .
• Some reports also suggest a ₹ 10 lakh accident insurance for drivers.

Significance of safety and insurance related norms in New rules for Ola, Uber etc,

• Enhance safety of passengers especially women.
• Provide financial protection in case of any mishaps.

E. Bike – Taxi Legalization related provisions

New Rules for Bike taxi Legalization

• States and union territories can now legalize and regulate Bike taxi under MVAG 2025
• Platforms like Rapido, Ola bikes, Uber Moto can operate with official permission.

Why rules for the Bike taxi matters,

• Create many jobs
• Offers affordable and faster last mile connectivity
• Provide jobs and income to thousands of two wheeler owners
• Brings informal service under regulations of safety and fairness.

F. Revenue sharing model for platforms like Ola, Uber in the New rules,

New Commission Model,

• If the vehicle is owned by the platform (fleet model) than driver must get at least 60 % of The fare.
• If the driver owns the vehicle ( individual aggregator model) than driver must receive minimum 80 % of The fare and Platforms commission is capped at 20%

Purpose for bringing new Revenue sharing model,

• Ensure fair earnings for driver .
• Prevent exploitation by digital platforms.
• Encourages self employment and asset ownership .

Implementation Timeline to New Rules for Ola, Uber and other platforms

• All states and Union territories have 3 months by October 1, 2025 to adopt and notify these rules.
• States are allowed to make guidelines more strict, but can’t dilute them.

Why this New rules for Ola, Uber and other platforms matters?

• These MVAG 2025 Reform aims for Standardization of rules across India, ease out  travel and tourism and allows for fair compitation
• Balance the interests of driver, passenger and aggregators.
• Provide legal backing for bike taxi and fare and all insurance and revenue models.

These New Rules & guidelines is a major reform taken by the Government of India for digital mobility ecosystem , making it more formalize.