SRINAGAR: The Government has capped surge pricing by app-based cab services at no more than twice the State-notified base fare during peak hours, according to the Motor Vehicles Aggregators Guidelines, 2025 tabled in the Lok Sabha on Thursday. The policy also allows fares to drop up to 50 per cent below the base rate, placing both upward and downward limits on dynamic pricing for the first time.
The Ministry of Road Transport and Highways said the guidelines are intended to regulate app-based aggregators while maintaining a light-touch approach. State governments remain the competent authorities to license and oversee these platforms.
Under the fare-related provisions, the State-notified fare will serve as the base rate for all dynamic pricing. The Ministry said the cap is aimed at ensuring transparency and preventing unjustified fare escalation, adding that licences may be suspended or cancelled if aggregators violate pricing rules.
The guidelines also guarantee that drivers of their own vehicles receive at least 80 per cent of the fare, while drivers operating aggregator-owned vehicles must be paid a minimum of 60 per cent. The Ministry said this revenue structure ensures that drivers, not companies, benefit most during surge periods, thereby increasing supply during high-demand hours.
The norms further bar aggregators from charging passengers for dead mileage except when the pick-up distance is below three kilometres.
On app-based rental taxi services, the Ministry said the Bharat Taxi App, developed under the Taxi Cooperative Limited, is currently undergoing testing and trials.
The answer also outlined extensive welfare measures mandated for drivers, including a minimum Rs 5 lakh health insurance cover, Rs 10 lakh term insurance, mandatory medical and psychological assessments, police verification, induction training, annual refresher courses, and protections against unfair treatment. Aggregators are required to maintain digital records of driver details and ensure fare transparency to minimise disputes.
