India Legalizes Bike Taxis, Sets Fare Rules in New Ride-Hailing Guidelines
The Ministry of Road Transport and Highways has issued the Motor Vehicle Aggregator Guidelines 2025, bringing much-needed clarity to India's ride-hailing industry. The new rules legalize bike taxis, allow dynamic pricing, and set fare share ratios for drivers.
Clause 23 of the guidelines authorizes state governments to permit the aggregation of non-transport motorcycles for shared mobility services, effectively legalizing bike taxis across India. This move is set to expand mobility options, particularly in dense urban areas.
Aggregators must now adhere to strict safety and training standards. They must onboard only police-verified drivers, provide at least 40 hours of induction training, and ensure vehicles are fitted with AIS-140 compliant GPS devices and panic buttons. This ensures passenger safety and driver accountability.
The guidelines also introduce fare flexibility. Ride-hailing apps can now charge up to twice the base fare during peak hours and offer up to 50% discounts during off-peak hours. This dynamic pricing model allows platforms to manage demand and supply more effectively. Surge pricing is now officially legalized, with base fares remaining under state government purview.
Fare share ratios have been clearly defined. Drivers using their own vehicles must receive at least 80% of the fare, with aggregators allowed to retain a 20% commission. If the aggregator owns the vehicle, the driver's minimum share is set at 60%. These ratios aim to balance the interests of both drivers and platforms.
To enhance user experience, ride-hailing apps must now be available in regional languages and comply with India's new data protection framework. This ensures accessibility and data security for all users.
Both passengers and drivers will face penalties for cancellations without valid reasons. Aggregators are required to clearly define and disclose valid cancellation reasons, promoting fairness and accountability.
The Motor Vehicle Aggregator Guidelines 2025 mark a significant step towards regulating India's ride-hailing industry. They legalize bike taxis, introduce fare flexibility, ensure driver and passenger safety, and promote fairness. These changes are expected to boost the sector's growth and improve services for both drivers and passengers.
