Centre Permits Cab Aggregators to Charge Up to Twice Base Fare During Peak Hours

The Ministry of Road Transport & Highways has approved updated regulations permitting cab aggregator platforms—including Uber, Ola, and Rapido—to charge surge fares up to twice their base rates during peak hours, a significant increase from the earlier cap of 1.5 times .

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Dubbed the Motor Vehicles Aggregator Guidelines 2025, the rules also set a lower threshold for non-peak times, allowing fares to go as low as 50% of the base fare . The base fare is governed by state-notified rates and includes a minimum charge covering the first 3 km to account for “dead mileage” — the distance a driver travels without a passenger.

In addition to pricing adjustments, the guidelines mandate:

• Cancellation penalties: A 10% charge (capped at ₹100) applies to driver- or rider-initiated cancellations without valid reasons.

• Driver insurance: Minimum health cover of ₹5 lakh and term insurance of ₹10 lakh .

• Vehicle age limit: Aggregators cannot enlist vehicles older than 8 years.

• Safety measures: Functional vehicle-tracking systems and compliance with app-prescribed routes are mandatory.

States have been urged to adopt these guidelines within a three-month timeframe.

• For commuters: Travel costs may increase during peak hours—potentially doubling—while offering discounted fares during off-peak times.

• For drivers: Guaranteed insurance coverage and age limits aim to professionalise the fleet.

• For aggregators: Greater flexibility in pricing could improve platform reliability and user experience during high-demand periods.

• For policymakers: The framework balances market-driven pricing with consumer protection, safety, and regulatory clarity.