Uber, Ola Can Now Charge Double During Peak Hours Under New Rules
The Union government has released updated Motor Vehicle Aggregator Guidelines 2025, introducing major reforms for ride‑hailing platforms like Ola, Uber, Rapido, inDrive, and bike taxis. Implementation starts from July 1, with states required to align regulations within 90 days.
Surge Pricing
Platforms can now impose fares up to twice the base fare during peak hours, up from the previous 1.5× limit. Off‑peak fares cannot drop below 50% of the base. A guaranteed base fare covers the first 3 km of any trip, ensuring drivers are compensated for distance-related costs.
Safety And Insurance
New safety mandates include:
- Every vehicle must have a working Vehicle Location and Tracking Device linked to app and control centres
- ₹5 lakh health insurance and ₹10 lakh term insurance for drivers
- Grievance teams and 24×7 multilingual customer support
- Drivers rated below the 5th percentile must undergo quarterly training, or face temporary deactivation.
Cancellation Fees
A standard cancellation charge of 10% (up to ₹100) applies when a trip is cancelled without valid reason. This penalty is shared equally between the driver and aggregator, and also applies to passenger-initiated no-shows.
Bike Taxi Legitimisation
For the first time, states may allow private motorcycles to operate as ride-hailing vehicles under aggregators. Services like Rapido, once limited by state bans, may now operate legally if state governments notify rules within 90 days. Aggregators must ensure drivers receive at least 80% of fare revenue, while authorities can impose additional approval or levies.
Industry Implications
Operators including Ola, Uber, Rapido, and inDrive have welcomed the changes, highlighting improved clarity on surge pricing and the gradual inclusion of bike taxis. For commuters, the rise in peak-hour fares may mean higher costs, but improved availability during high-demand periods. Safety enhancements and standardized grievance resolution aim to uplift overall service quality.
