Union govt issues rules for Ola, Uber: All you need to know

The new rules cap the surge pricing at 1.5 times the base fare, and also cap the commission that a cab aggregator can charge drivers.
Ola and Uber
Ola and Uber
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The long-awaited Motor Vehicles Aggregator Guidelines for companies such as Ola and Uber were released by the Ministry of Roads, Transport and Highways on Friday, in the government’s first ever move to regulate the space. These guidelines will establish a regulatory framework for aggregators by state governments, in order to ensure that aggregators are responsible for their operations.

The guidelines outline compliance for both aggregators and drivers and also lay down rules for pricing, eligibility for drivers, responsibilities on part of the aggregators with respect to safety, among others.


The new guidelines state that customers will be charged for minimum of 3 kilometers, which is the base fare, to compensate for dead mileage and distance travelled and fuel utilized for picking up the customers.

The rules cap the surge pricing at 1.5 times the base fare, and the aggregator shall be permitted to charge a fare 50% lower than the base fare. 

It also caps the percentage of fare that an aggregator can receive at 20% (commission), with at least 80% having to go to the driver. In addition, the state government can charge 2% towards the state exchequer for amenities and awareness programmes for vehicles operated by aggregators. 

When a booking is cancelled by the driver after accepting, a penalty of 10% of the total fare not exceeding Rs 100 will be imposed when such a cancellation is made without a valid reason that shall be stipulated by the aggregator on its website and on the app. The same rules apply for the rider as well. This cancellation amount when the rider cancels will be divided between the driver and the aggregator. 


For a driver to be taken on as a driver partner on Ola, Uber or any such platform, they are required to have a valid proof of identity, hold a valid driving licence, a KYC compliant bank account or Jan Dhan account.

In addition, the driver must have a minimum driving experience of two years, and if it is less than two years, a driver training must be facilitated by the aggregator for 15 days, in addition to the induction programme. The driver must not have been convicted in the last three years, must undergo a medical examination (the cost for which will be borne by the aggregator), a police verification of the driver, and a valid enforceable Service Provider Contract in both English and a language the driver understands. 

The aggregator, on its part, will have to ensure they provide drivers with health insurance of not less than Rs 5 lakh per year and increased by 5% each year, a term insurance of not less than Rs 10 lakh and a 5% increase each year.

Aggregators are also required to conduct refresher training programs, ensure that drivers are not logged in for more than 12 hours and that if extended, a mandatory break of 10 hours will be imposed. 

“The Aggregators to develop a mechanism on their respective App to ensure that Drivers engaged with more than one Aggregator do not drive beyond a cumulative period of 12 hours either on their or another Aggregators App so as to safeguard the Driver, passenger as well as road users,” the guidelines add. 

Vehicles and safety

For the vehicle, apart from regular vehicle compliance norms, the guidelines also call for a AIS 140 Certified Vehicle Tracking and Monitoring System with relevant panic buttons fitted at the control room of the aggregator, a fire extinguisher, a disabled child lock mechanism and enabled manual override for the central locking system. It must be noted that these have been asks particularly pertaining to women’s safety in these cabs. 

Other safety measures include that ensuring that the driver plies on the assigned route as per the app, and if he doesn’t comply with the same, a mechanism is developed where the app device indicates the fault to the driver and the control room of the aggregator immediately communicates with the driver with regard to the same.

The guidelines also state that a mechanism must be enforced on the app to ensure that the identity of the driver undertaking a trip is the same as the one enlisted with the aggregator requiring verification every time a trip is accepted. It also calls for spot checks.

For ride pooling (which is currently disabled because of the pandemic), the guidelines also state that female passengers shall also be provided the option to pool only with other female passengers.

Customer data

With regard to customer data from the app, the aggregator will have to ensure it is stored on a server within the country for a minimum of three months and a maximum of 24 months, and will be made available to the state government as per process of law. “Any data related to customers shall not be disclosed without the written consent of the customer,” it adds. 

The guidelines also seek transparency on the part of actions of the aggregator, including that of the app’s algorithm, proportion of the fare that is payable to the driver, incentives given to the drivers, charges received from the driver and other information as may be notified by the state government. These disclosures have to be made on the website and app. 

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