Cab-hailing platforms such as Ola and Uber can now charge up to 2x the base fare during high-demand periods, according to the Motor Vehicles Aggregator Guidelines (MVAG) 2025 released by the Ministry of Road Transport and Highways on July 1. The earlier cap on surge pricing was 1.5 times the base fare.
The ministry has recommended that states implement the new guidelines within three months, enabling aggregators to respond better to market demands while staying within a regulatory framework.
In a significant policy update, Motor Vehicles Aggregator Guidelines (MVAG) 2025 permits the use of non-transport (private) motorcycles for carrying passengers through aggregator platforms—subject to state government approval. This move addresses a long-standing regulatory ambiguity in shared mobility.
“The state government may allow aggregation of non-transport motorcycles for journey by passengers as shared mobility through aggregators,”
the guidelines state, highlighting goals such as reduced congestion, lower pollution, and enhanced access to hyperlocal transport.
As per Clause 23 of the new guidelines, states are authorized to impose daily, weekly, or fortnightly charges on aggregators operating private motorcycles for passenger services.
This provision may help formalize and regulate the operations of bike taxi platforms, ensuring compliance and revenue generation for states.
Bike taxi aggregators like Rapido and Uber, who have previously operated in a regulatory grey area in several regions—including Karnataka, where a ban led to public protests—have expressed support for the updated rules.
Rapido hailed the guideline as a “milestone in India’s journey towards a Viksit Bharat,” stating it will enhance last-mile connectivity and promote affordable transport in underserved communities.
Uber echoed similar sentiments, commending the Road Transport and Highways Ministry’s forward-thinking:
“Timely adoption by states will be key to ensuring uniform implementation and building much-needed predictability for all stakeholders. We commend the ministry for its consultative and balanced approach,”
said an Uber spokesperson.
The MVAG 2025 replaces the 2020 guidelines, bringing the framework in line with the evolving nature of India’s urban transport ecosystem. With growing demand for e-rickshaws, electric vehicles, bike taxis, and flexible pricing, the Ministry aims to balance innovation with user safety and operational oversight.
The ministry noted that the revised rules aim to maintain a light-touch regulatory model while also ensuring safety, security, and driver welfare across the mobility ecosystem.
The introduction of the Motor Vehicles Aggregator Guidelines (MVAG) 2025 marks a pivotal moment in India’s shared mobility landscape. By allowing cab aggregators like Ola and Uber to charge up to twice the base fare during peak hours, the government aims to bring pricing flexibility in line with demand-driven transportation models while maintaining regulatory oversight.
The approval for aggregating non-transport motorcycles as bike taxis—pending state consent—addresses a long-standing gap, potentially expanding affordable last-mile connectivity and reducing urban congestion. The move has been widely welcomed by industry players like Rapido and Uber, who see it as a progressive step toward innovation and operational clarity.
As states prepare to implement these guidelines over the next three months, their timely adoption will be crucial in achieving uniformity and ensuring benefits reach both consumers and drivers. MVAG 2025 is not just a policy update—it reflects India’s broader push toward sustainable, inclusive, and technologically advanced urban mobility.