Cab aggregators like Ola and Uber can now charge up to twice the base fare during busy hours. This change is part of the new Motor Vehicles Aggregator Guidelines (MVAG) 2025 issued by the Ministry of Road Transport and Highways on July 1, 2025. Previously, surge pricing was limited to 1.5 times the base fare. The updated guidelines aim to give these platforms more flexibility during peak traffic times while maintaining regulatory control. States are expected to implement these new rules within three months.
The MVAG 2025 also allows the use of non-transport motorcycles for passenger rides through aggregator platforms, if state governments approve. This change aims to reduce traffic congestion, lower pollution, and improve access to affordable transport. According to the guidelines, states can charge aggregators fees for using such motorcycles. This could help formalise bike taxi operations across India.
Ride-hailing operators like Rapido and Uber have welcomed these new guidelines. Rapido called it a significant step towards a more developed India, highlighting the potential for improved last-mile connectivity. Uber also praised the government’s approach, stating that timely adoption by states is essential for consistent implementation.
The MVAG 2025 replaces the earlier 2020 version and reflects the current needs of India’s mobility landscape. There is a growing demand for bike taxis, e-rickshaws, and electric vehicles. The Ministry has stated that the updated framework aims to adopt a light-touch regulatory approach while ensuring safety and driver welfare.
In addition to surge pricing, the new guidelines introduce rules for cancelation fees. Drivers and riders can be charged a fee of 10% of the fare (up to ₹100) for canceling rides without valid reasons. The guidelines also ensure that drivers receive training in safe driving, first aid, and handling passengers with disabilities.
The Ministry aims to create a balanced ecosystem that offers passenger safety and transparency in pricing. With these changes, India is working towards a more efficient and sustainable urban transport system. The government’s focus on innovation alongside regulation shows a commitment to improving the ride-hailing experience for both passengers and drivers. As states prepare to implement these guidelines, the next few months will be crucial for the future of shared mobility in India.
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