Cabs get government okay for surge pricing

The Central Government has permitted cab aggregators to increase peak-hour surge prices, officially allowing dynamic pricing. Under the new rules, fares can go as low as 50% below the base fare during off-peak hours and surge up to a maximum of 200% (double the base fare) during high-demand periods. However, no additional charges will be permitted unless the trip distance is below 3 km, the government clarified.

The Centre has also approved the use of private (non-transport) motorcycles for passenger rides via aggregator platforms like Ola, Uber, and Rapido.

According to the guidelines, fare calculation must strictly apply from the pickup point to the drop location, with no hidden or extra fees beyond the specified dynamic pricing limits. As per the new rule, if a driver cancels a ride after accepting it on the app without a valid reason, a penalty of 10% of the estimated fare—capped at ₹100—will be imposed, according to the new guidelines issued by the Centre. This penalty amount will be shared equally between the driver and the aggregator platform. Similarly, the same cancellation penalty applies to passengers who cancel a booking without a specified reason.

In a significant move for driver welfare, the Centre has also made it mandatory for aggregators to provide health insurance of at least ₹5 lakh and term insurance coverage of ₹10 lakh for every driver associated with their platform.

Under the new rules, state governments have been given the authority to set base fares for different categories of vehicles, including auto-rickshaws and bike taxis, which are now officially covered under the aggregator policy. For context, current base fares in major cities stand at around ₹20-₹21 per kilometer. In cases where a state has not formally notified base fares, it will be the responsibility of the aggregator to declare the base fare and inform the state government accordingly.

No charge for dead mileage

The guidelines also provide relief to passengers by ensuring that they are not charged for dead mileage — the distance a driver travels to reach the pickup point. The only exception is when the distance to the pickup location is less than 3 km. Beyond that, the fare will be strictly calculated based on the distance from the pickup point to the final destination.

To strengthen passenger safety, the Centre has made it compulsory for all vehicles operating under aggregator platforms to be equipped with Vehicle Location and Tracking Devices (VLTDs). The data feed from these devices must be accessible in real-time both to the aggregator platform and to the state’s integrated command and control centres, allowing authorities to monitor trips actively and respond quickly in case of emergencies.