Centre allows higher surge pricing, legalizes bike taxis under new MV aggregator rules

In a major update to India’s ride-hailing regulations, the Ministry of Road Transport and Highways on July 1 released the Motor Vehicles Aggregator Guidelines (MVAG) 2025, permitting cab aggregators to charge up to twice the base fare during peak traffic hours. This marks a significant change from the previous surge cap of 1.5 times the base fare, aiming to give platforms more pricing flexibility during high-demand periods.

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States have been advised to adopt and implement the revised guidelines within the next three months. The ministry emphasized that while fare flexibility is being increased, an overarching regulatory framework will continue to govern aggregator operations to ensure accountability and user protection.

The updated guidelines also legalize the use of private (non-transport) motorcycles for passenger transport via aggregator platforms, something that had previously existed in a legal grey area in many states. With state approval, these motorcycles can now be used for shared mobility services, especially to enhance last-mile connectivity, reduce congestion, and expand affordable transport options.

Under Clause 23, states will be allowed to impose daily, weekly, or fortnightly fees on aggregators who use such two-wheelers. This decision is expected to particularly benefit bike taxi services like Rapido and Uber, both of which have welcomed the move. Rapido termed it a "milestone" in building accessible mobility, while Uber praised the ministry’s "balanced and consultative approach."

The MVAG 2025 replaces its 2020 version, aligning regulatory frameworks with evolving urban mobility needs including bike taxis, e-rickshaws, EVs, and dynamic pricing.