Government Clears Fare Surge Hikes For Cabs, Private Bikes As Taxis Under New Aggregator Guidelines

Cab fares during peak traffic hours could soon see a jump, with the government allowing aggregators to charge up to double the notified base fare under the new Motor Vehicle Aggregator Guidelines, 2025.

The guidelines, notified by the Ministry of Road Transport & Highways, also open the door for private two-wheelers to be used as taxis, a long-pending demand from companies like Rapido.

The fare notified by the respective state government will act as the base fare. Aggregators can now charge as low as 50% below this base during low-demand periods and hike prices up to twice the base during peak hours, as permitted by Clause 17.3 of the guidelines. Earlier, prices could only be hiked 1.5 times.

States have been advised to adopt the revised guidelines within three months.

In a major move to expand last-mile connectivity, the government has also allowed the use of non-transport motorcycles for commercial aggregation, under Clause 23 of the revised norms. This allows private bike owners to sign up on platforms like Rapido and offer rides or deliveries, especially in hyperlocal areas.

"By recognising non-transport motorcycles as a means of shared mobility, the Government has opened the door to more affordable transportation options for millions, especially in underserved and hyperlocal areas," Rapido said in a statement.

Aligned with India’s goals of sustainable urban development, the move will also help address pressing challenges such as traffic congestion and vehicular pollution, while expanding the reach of last-mile connectivity and hyperlocal delivery services, Rapido said.

For the welfare of drivers, aggregators have also been asked to ensure a health insurance of minimum Rs 5 lakh for each driver and a term insurance of Rs 10 lakh, with yearly upward revisions.