BlaBlaCar, a French mobility platform, said earlier this week that India has become its largest market globally, with more than 20 million users and over 2 million passenger journeys taking place every month. Yet despite the growth, legal experts say app-based carpooling continues to operate in a regulatory grey area -- where private vehicles are barred from commercial use but cost-sharing between travellers is not explicitly regulated.
While platforms such as BlaBlaCar, Quick Ride and SRide position themselves as facilitators of shared travel rather than commercial transport services such as Uber, the legality of their operations often depends on how authorities interpret existing provisions of the Motor Vehicles Act, 1988.
A ‘loophole’ in the law
The
Motor Vehicles Act requires permits for vehicles used for commercial passenger transport, while private vehicles registered with white number plates cannot be used for transport "for hire or reward" without appropriate authorisation.
However, the law does not define carpooling as a separate category.
"The Motor Vehicles Act simply does not contemplate app-based carpooling as a distinct category," said Amitraj Kaushal, advocate at the Supreme Court of India. "Nothing in the Act explicitly says this is permitted and nothing explicitly says it is prohibited."
According to Kaushal, the legislation was drafted long before digital mobility platforms emerged and has not been substantially updated to address them. As a result, carpooling apps do not fit neatly into existing classifications such as contract carriage, stage carriage or private vehicles.
Rohan V Tigadi, principal counsel at TLaw Chambers, said there is no express prohibition on app-based carpooling under the law. However, vehicles used as public service vehicles, or for transport 'for hire or reward', require permits.
"If the app simply facilitates non-commercial cost sharing between persons already travelling together with no element of 'hire or reward', there is no specific prohibition in the Motor Vehicles Act," Tigadi said. "However, if the app is used for systematic carriage of passengers against payment, then such carpooling activities would fall within the regulatory framework applicable to commercial transport."
The 'hire and reward' question
Let's understand what is 'hire or reward'. The term is not specifically defined under the Motor Vehicles Act, but legal experts say it has traditionally been interpreted as a situation where a driver receives payment in exchange for transporting passengers.
For regulators, the question is whether money exchanged during a carpooling trip constitutes legitimate cost-sharing or payment for a transport service.
Kaushal argued that genuine carpooling operates on a different principle from commercial taxi services.
"The driver is already making the journey and is simply sharing the cost of that journey with co-passengers," he said. "There is no profit motive, no separate commercial enterprise and no holding out of services to the general public in the way a taxi or cab aggregator does."
The fine line between sharing costs and earning profits
Platforms operating in the space argue that this distinction is fundamental to their business models.
"Carpooling is built around a simple premise: to make travel more affordable and efficient for everyone by bringing together people who are already travelling on the same route, allowing them to share the journey and split the associated travel costs," Jit Banerjee, director at BlaBlaCar, told Business Standard.
According to Banerjee, the platform uses algorithm-driven fare recommendations designed to help drivers recover expenses such as fuel and toll charges rather than generate earnings.
"There are clearly communicated caps on the price drivers can charge," he said.
Legal experts say the challenge arises when authorities adopt a broader interpretation under which any payment exchanged between passengers and drivers is treated as consideration for transport services.
Why states have intervened
The lack of a dedicated national framework has resulted in varying approaches across states.
Karnataka has been among the most active in scrutinising app-based carpooling platforms, with transport authorities periodically arguing that private vehicles are being used for commercial purposes without the permits required for taxi operations.
Similar concerns have surfaced in Maharashtra, while Delhi has periodically discussed regulatory approaches to carpooling without establishing a comprehensive framework.
Tigadi said states are justified in taking action against services that effectively operate as commercial transport networks but should distinguish between profit-making services and genuine non-profit carpooling.
"The states would do well to distinguish between commercial carpooling services and bona fide non-commercial, non-profit carpooling services," he said, adding that overly broad enforcement measures could face legal challenges.
According to BlaBlaCar, Chandigarh is currently the only jurisdiction where the aggregation of non-transport vehicles is explicitly prohibited under the Chandigarh Administration Motor Vehicles Aggregators Rules, 2025.
The company told Business Standard it is engaging with authorities on the issue, arguing that intercity carpooling differs from conventional cab aggregation because it is not strictly an on-demand service.
Can carpooling help congested Indian cities?
Mobility experts argue that if properly regulated, carpooling can provide wider benefits beyond lowering travel costs.
"Carpooling can reduce the number of single-occupancy vehicles on roads, improve vehicle utilisation, lower fuel consumption and reduce emissions," said Surendar Nath, executive director at ETO Motors.
However, Nath cautioned that its effectiveness increases when integrated with public transport systems rather than functioning in isolation. He said Europe's experience demonstrates how regulatory clarity can encourage adoption.
"European cities have strong public transport networks, dedicated mobility policies, high parking costs and clear regulations that encourage shared mobility," Nath said. "In India, regulatory ambiguity, safety concerns, inconsistent ride patterns and lack of integration with public transport have limited large-scale adoption."
Nath said India could consider creating a dedicated regulatory framework for app-based carpooling that addresses safety, insurance, liability and operational standards while positioning it as part of a broader multimodal mobility ecosystem.
The insurance challenge
Beyond legal questions, carpooling also raises insurance concerns. Rakesh Kumar, founder and managing director of Square Insurance, said passengers travelling in private cars are generally covered under the vehicle's mandatory third-party insurance in cases involving driver negligence.
However, the extent of protection depends on the policy and the circumstances surrounding the accident.
"The challenge arises when the vehicle is being used in a manner that differs from its insured purpose," Kumar said. "Vehicle owners need to clearly understand their policy terms before participating in organised carpooling arrangements."
Kumar also said the growth of shared mobility may create demand for insurance products tailored specifically to carpooling.
Such products could bridge the gap between private and commercial vehicle insurance while addressing risks associated with shared travel, he said.
Lessons from abroad
Several countries have addressed the issue by explicitly distinguishing cost-sharing from commercial passenger transport.
In France, where BlaBlaCar is based, carpooling is formally recognised as a mobility category. Drivers can recover travel expenses but are not permitted to profit from journeys. The French government has also promoted carpooling through incentives and infrastructure support.
The United Kingdom similarly permits cost-sharing arrangements while maintaining restrictions on profit-making. Once drivers begin earning beyond travel costs, commercial transport regulations may apply.
Germany and several other European countries follow comparable approaches, generally allowing non-profit ride-sharing while regulating professional passenger transport separately.
According to BlaBlaCar, the absence of a legal definition remains one of the biggest challenges facing the sector. Banerjee said a clear legal definition or guidelines from the Ministry of Road Transport and Highways could help harmonise state-level approaches.
For now, India’s carpooling story continues to run on an old legal map. The demand is growing, the platforms are scaling up, and commuters are using private cars to lower the cost of travel. But until the law draws a clear line between sharing a journey and selling one, every white-plate ride arranged through an app will remain somewhere between convenience and compliance.
 "White plates, shared costs: Why carpooling remains legal grey zone in India")
