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 :
- Peak hours pricing ( Surge pricing)
- Ride cancellation and penalties
- Revenue sharing with drivers
- Safety and insurance for passengers
- Legality of bike taxis
- 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 )
- The driver refuses to go to the destination
- Driver ask for extra money
- Vehicle is different than listed
- 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,
- Panic button in Vehicle
- Background verification for driver
- Driver training in road safety and passenger conduct
- 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.