Winning Bizness Desk

Mumbai. Cab aggregators like Ola, Uber, Rapido, and inDrive have been allowed by the Central Government to charge up to twice the base fare during peak hours. This is a change from the earlier cap of 1.5 times the base fare. The rule aims to balance demand and supply during high-traffic hours. These changes are part of the new Motor Vehicle Aggregator Guidelines (MVAG) 2025 issued on Tuesday.

States told to implement by September 2025

The Centre has directed all states to roll out the new rules within 3 months, i.e. by September 2025. The base fare will continue to be decided by respective state governments, depending on local conditions and vehicle type.

What counts as peak time?

Peak hours refer to periods of high demand—typically between 8 AM to 11 AM and 5 PM to 9 PM, or during heavy rainfall, festivals, or major city events. During these windows, app-based cab companies can charge up to 2x the base fare.

Drivers to be fined for cancellations

A major consumer-friendly change is a 10% penalty on the driver if they cancel a ride after accepting it without valid reason. The penalty will be 10% of the base fare, but capped at a maximum of ₹100.

Minimum fare rule for non-peak hours

Even during low-demand or non-peak hours, the new guidelines state that the fare cannot fall below 50% of the base rate. This protects driver earnings, especially during off-peak slots like afternoon hours or late nights.

Mandatory ₹5 lakh insurance for drivers

The government has also made ₹5 lakh accident insurance cover mandatory for all cab, auto, and bike taxi drivers. This is to ensure basic safety and financial support in case of accidents.

New Rules Explained Through Q&A

Q1. What change has the government made for cab services?

The Centre now allows cab apps to charge up to 2x base fare during peak hours, up from the earlier 1.5x.

Q2. What are peak hours?

Morning 8–11 AM, evening 5–9 PM, and times of high demand like festivals or rain.

Q3. Will fares change during non-peak hours too?

Yes, fares during off-peak hours must be at least 50% of the base fare.

Q4. Who sets the base fare?

State governments decide base fares depending on city, vehicle type, and local factors.

Q5. What if a driver cancels after accepting the ride?

10% penalty of the base fare is charged (max ₹100), to discourage careless cancellations.

Q6. When will these rules be enforced?

By September 2025, states must implement the updated MVAG 2025 guidelines.

Q7. Any other important update?

Yes, every driver must now have ₹5 lakh accident insurance cover, made mandatory.

Key Points in a Nutshell

• Ola, Uber, Rapido can now charge 2x fare during peak hours.
• Peak time defined as 8–11 AM and 5–9 PM, or high-demand periods.
• Off-peak fares can’t drop below 50% of base fare.
• Drivers cancelling rides after accepting will pay 10% penalty.
• Penalty capped at ₹100 even for high-value rides.
• All states must implement new rules by September 2025.
• ₹5 lakh insurance now mandatory for all drivers.