Ola, Uber get permission from government to double charge to traveler

Ola, Uber Rate: The Indian government, through the Ministry of Road Transport and Highways, has released the Motor Vehicle Aggregator Guidelines (MVAG) 2025, which permit Ola, Uber, and other cab aggregators to charge up to twice (2x) the base fare during peak hours.

The previous cap was 1.5 times the base fare. This has now been increased to 2 times the base fare during high-demand periods.

Minimum Fares during Non-Peak Hours:

During non-peak hours, fares must be a minimum of 50% of the base fare. This is intended to prevent predatory pricing and ensure some earnings for drivers even in lean periods.

State governments will be responsible for notifying the base fare for various categories of vehicles (taxis, auto-rickshaws, bike taxis). If a state hasn’t set a base fare, the aggregator must declare it to the state government.

Cancellation Penalties:

To reduce arbitrary cancellations, a penalty of 10% of the fare (capped at Rs 100) can be imposed on both drivers and passengers for cancellations made without a valid reason. This penalty will be shared between the driver and the aggregator.

The guidelines mandate that drivers who own their vehicles must receive at least 80% of the total fare. Aggregators are also required to provide health and term insurance to drivers. A significant development is the allowance for non-transport (private) motorcycles to be used for passenger journeys through aggregators, subject to state government approval.

This brings much-needed clarity for bike taxi services. Passengers will generally not be charged for dead mileage (distance a driver travels without a passenger) unless the pick-up distance is less than 3 km.

Implementation by States: State governments have been advised to adopt these revised guidelines within three months and can introduce additional provisions to suit local needs.

This move aims to balance the need for affordability for commuters with the operational flexibility required by aggregators and the welfare of drivers. However, it’s expected that commuters, especially during rush hours, might experience higher fares.

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