Motor Vehicle Agregator Guidelines: Empowering drivers, customers alike

The promise of flexibility, independence, and technological ease has attracted millions of drivers to app-based ride-hailing platforms in recent years. However, rising commissions, unclear policies, arbitrary suspensions, and lack of protections turned that promise into frustration for many. These challenges, experienced by over 3 million gig drivers across India, highlighted the urgent need for comprehensive and enforceable regulation.

 

In response, under the visionary leadership of hon’ble Prime Minister Narendra Modi and guidance of Nitin Gadkari, the Ministry of Road Transport and Highways (MoRTH) had earlier released the “Motor Vehicle Aggregator Guidelines, 2020” under the Motor Vehicles Act, 1988. These offered a regulatory framework empowering state governments to license and oversee aggregators fuelling the growth of the ride-hailing industry. Yet, with growing concerns over safety, fairness, and accountability for both drivers and passengers, MoRTH has now introduced the Motor Vehicle Aggregator Guidelines, 2025: a major policy update to bring structure, safeguards, and inclusivity to India’s digital mobility ecosystem. 

 

 

These guidelines, built on the legal foundations of the Motor Vehicles Act, 1988 aim to regulate the operations of app-based cab aggregators such as Ola, Uber, Rapido, and others. More importantly, the guidelines seek to provide balanced benefits to both drivers and passengers, while aligning with constitutional mandates and judicial directives.

 

One of the most notable aspects of the 2025 guidelines is protection of drivers’ interests. Until now, drivers associated with aggregator platforms often found themselves in a precarious situation with low earnings, arbitrary off-boarding, lack of insurance, and insufficient legal recourse. The new guidelines seek to address these systemic gaps.

 

The guidelines require aggregators to ensure a minimum guaranteed earning per hour, or day, based on base fares notified by the states. It also mandates that fare settlement between the aggregator and the driver must be done on a daily, weekly, or fortnightly basis, based on mutual agreement. This move is expected to eliminate the earnings volatility faced by thousands of drivers, especially during lean periods. In addition, the government now requires every aggregator to provide health insurance of at least ₹5 lakh and term insurance of ₹10 lakh. These protections bring gig workers into the fold of formal labour structures.

 

Further, the new guidelines introduce transparency in commissions, capping the aggregator’s share at 20 per cent of each fare in most cases. This ensures drivers retain a fair portion of their earnings. Aggregators must also provide clear and itemised information regarding payment deductions, fare splits, and penalties. 

 

The guidelines also require each aggregator to establish a formal grievance redressal system, where issues like ride cancellations, payment disputes, or suspensions can be addressed in a time-bound and transparent manner. Drivers will also receive periodic training including a 40-hour induction programme covering app usage, emergency response, road safety, traffic rules, gender sensitisation, Divyangjan awareness, customer interaction, digital literacy, and more., making them better equipped for future mobility challenges.

 

For passengers, the guidelines are equally transformative. With rising concerns around ride safety, data privacy, and fare manipulation, the new guidelines bring in much-needed safeguards.

 

All drivers on aggregator platforms must undergo mandatory police verification, health check-ups, and behavioural training. Furthermore, every vehicle must be equipped with in-app emergency buttons, GPS-based tracking, and trip-sharing features, all of which enhance the safety of riders, particularly women and children. A 24x7 control room and helpline system must be established by aggregators under state supervision.

 

Another major passenger benefit is the regulation of fares and surge pricing. The guidelines set clear limits: surge fares are capped at 1.5 to 2 times the base fare depending on state policy, ensuring that passengers are not exploited during high-demand periods. In addition, the platforms are required to display fare breakdowns transparently, including base fare, dynamic charges, aggregator share, and government taxes. 

Crucially, the guidelines also take into account the privacy of users. Aggregators are instructed to store user data on servers located within India and to abide by data protection frameworks, including Digital Personal Data Protection Act, ensuring data is not misused or leaked, and is retained according to India’s sovereign data policies.

 

Aligned with PM Modi’s vision of Viksit Bharat@2047, which emphasises inclusive and sustainable growth, and his unwavering commitment to upholding the honour and self-respect of Divyangjan , the guidelines mandate that a portion of aggregator fleets be made Divyangjan-friendly and an appropriate representation of Divyangjan as drivers in the workforce is to be ensured. The exact number of such vehicles will be determined by individual states based on local needs and requirements.

 

In a major push for sustainability, aggregators are required to transition towards electric mobility, alternate fuel or zero emission vehicles in their fleet. Concerned air regulatory bodies will set state-wise EV targets for ride-hailing platforms, and the same aligns with India’s climate and clean air goals. Public transport systems such as Delhi’s DEVI buses are already examples of EV integration. 

 

The guidelines also align with Directive Principles of State Policy, particularly Article 39, which directs the state to ensure that citizens, including gig workers, have the right to an adequate means of livelihood. Additionally, Article 21 of the Constitution

guaranteeing the Right to Life and Personal Liberty has been interpreted by courts to include the right to a safe working environment and the right to mobility with dignity.

 

Several judicial decisions have reinforced the need for proper regulation in the ride-hailing sector. In People’s Union for Democratic Rights v. Union of India (1982) and Olga Tellis v. Bombay Municipal Corporation (1985), the Supreme Court emphasised the right to livelihood as an integral component of Article 2. In the case of Uber India Systems Pvt. Ltd. v. Union of India (2020), the Delhi High Court upheld the right of state governments to regulate aggregator pricing and licensing, establishing that consumer interest must prevail over purely market-driven pricing models.

 

These judgments form the legal basis for many of the protections extended to gig workers under the 2025 guidelines which is an attempt to balance the passengers’ interest with profitability for motor vehicle aggregators yet prioritising the rights of

often-neglected gig workers.

 

On the lines of the Hon’ble PM’s approach of 'Minimum Government, Maximum Governance', the new guidelines provide a light touch regulatory system. Now the aggregators can take a single license for all types of motor vehicles applicable pan-state within 60 days. It does away with the requirement for ride-hailing companies to have arrangements for a driving test facility. Rather they are now encouraged to take benefit of the Ministry’s Scheme for Institutes of Driving Training and Research (IDTR), Regional Driving Training Centres (RDTC), and Driving Training Centres (DTC). These centres, funded by the central government, aim to make scientific training accessible even in remote areas with grants up to ₹17.25 crore for IDTRs, ₹5.5 crore for RDTCs, and ₹2.5 crore for DTCs based on population and geography. 

 

These institutes are not only equipping individuals with high-quality driving skills, but are also contributing to the creation of a pool of professionally trained drivers across the country. This initiative is expected to contribute significantly to enhancing road

safety and reducing the incidence of traffic accidents on Indian roads. The government has set an ambitious target of reducing road accident fatalities by 50 per cent by the year 2030, acknowledging that road accidents currently result in an estimated economic loss of 3 per cent of the national GDP.

 

The issuance of these guidelines reflects India’s robust federal structure and constitutional provisions. According to the Seventh Schedule of the Constitution of India, transport falls under this Concurrent List and empowers states to create rules for the licensing and functioning of aggregators. Section 93 of the Act is particularly significant, as it enables the central government to issue such guidelines or licensing frameworks for this purpose.

 

Although issued by the central government, the Motor Vehicle Aggregator Guidelines, 2025 may be followed by state governments and Union Territories, ensuring local adaptability. States have inter-alia been given the authority to: issue licenses to aggregators; monitor fare structures and surge pricing; enforce driver training and verification; penalise non-compliant platforms, authorise use of non-transport motorcycles for passenger journeys under shared mobility models, set and enforce electric vehicle targets for aggregator fleets.

 

This division of responsibilities reflects India’s model of cooperative federalism, where policy formulation is centralised, but implementation is context-sensitive and state-specific.

 

The Motor Vehicle Aggregator Guidelines, 2025 represent a progressive and timely step towards reforming India’s digital mobility ecosystem. The success of this initiative will hinge on effective enforcement, public awareness, and platform compliance. If followed by states, it has the potential to transform ride-hailing services into a safer, more accountable, and more inclusive mode of urban transportation, creating a win-win scenario for both drivers and riders across the nation.

 

In a country where informal workers often remain invisible in policymaking, these guidelines mark a pivotal shift. They treat the app-based driver not just as a service provider, but as a worker with rights, dignity, and aspirations. They recognise the passenger not merely as a consumer, but as a citizen entitled to safe, affordable, and transparent services.

 

The Motor Vehicle Aggregator Guidelines, 2025 represent a significant milestone for the digital mobility sector in India. By setting clear standards and responsibilities for aggregators, the guidelines emphasise fair earnings and social security for drivers, improved safety and convenience for passengers, and environmentally sustainable practices. This balanced and inclusive framework not only reinforces the foundation of India’s growing gig economy but also aligns seamlessly with PM Narendra Modi’s vision of Viksit Bharat @2047.

 

(The author, Shri Ajay Tamta, is the Hon’ble Minister of State Road Transport and Highways, Govt of India.)  (Disclaimer: These are the personal opinions of the writer. They do not reflect the views of www.business-standard.com or the Business Standard newspaper)