New Delhi, July 2 (IANS) The government has permitted cab aggregators like Ola, Uber and Rapido to charge up to twice the base fare during peak hours.

Previously, they were allowed to apply a surge or dynamic pricing of only up to 1.5 times the base fare.

The change was announced in the revised Motor Vehicle Aggregator Guidelines, 2025, released by the Ministry of Road Transport and Highways (MoRTH).

These new rules aim to strike a balance between user safety, driver welfare, and business operations.

As per the new rules, cab companies can now charge a minimum of 50 per cent of the base fare during non-peak hours.

The base fare will be the amount notified by the respective state government for different types or classes of motor vehicles.

States have been advised to adopt the new guidelines within the next three months.

The government has also clarified that the base fare should cover a minimum distance of 3 kilometres.

This is to compensate for the ‘dead mileage’ — the distance and fuel used by the driver to reach the passenger’s pickup point.

However, passengers will not be charged separately for dead mileage unless the total ride distance is less than 3 km.

In all other cases, the fare will be calculated only from the pickup location to the drop-off point.

The guidelines ensure that drivers are paid fairly. For drivers who own their vehicles and are onboarded by aggregators, they must receive at least 80 per cent of the total fare collected.

The aggregator can keep the remaining amount. The payment to drivers can be settled daily, weekly, or fortnightly based on their agreement with the company.

In cases where the vehicle is owned by the aggregator but operated by a driver, the driver must get at least 60 per cent of the fare collected, while the aggregator can retain the rest.

The government has also set new rules for cancellations. If a driver cancels a ride after accepting it without a valid reason, a penalty of 10 per cent of the fare — up to a maximum of Rs 100 — will be charged.

The same rule applies to passengers who cancel a ride without a valid reason.

–IANS

pk/na