Yes, they must be able to meet. Commuting students does not appear to be a problem here. Even commuter students can meet on campus. In addition I try to create groups that take the location of their residence in account. I leave it up to them to work it out among themselves.
Students submit a schedule they have agreed to for their regular group meetings.
It is simply a requirement. They provide the structure. In some classes. In every class where I have done this, I have used at least one of the formal class meetings each week for group work, so they can get started with no excuses. They find ways to meet outside class, once they have started.