Lok Sabha Question No. 2016 (UNSTARRED), answered on 2025-12-11
Subject: Surge Pricing by App- based Cabs
Ministry: ROAD TRANSPORT AND HIGHWAYS
Asked by: Dr. K Sudhakar

## GOVERNMENT OF INDIA MINISTRY OF ROAD TRANSPORT AND HIGHWAYS

## LOK SABHA UNSTARRED QUESTION NO.  2016 ANSWERED ON 11 TH  DECEMBER, 2025

SURGE PRICING BY APP- BASED CABS

2016.  DR. K SUDHAKAR:

Will the Minister of ROAD TRANSPORT AND HIGHWAYS

सड़क परिवहन औि िाजमार्ग मंत्री

be pleased to state:

- (a) whether it has been noticed that surge pricing is being practised by  app-based  cab  services  where  they  often  charge  customers higher prices than the actual fare, if so, the details thereof;
- (b)  the  steps  taken  to  regulate  surge  pricing  by  app-based  cab services and to provide clean and safe road travel;
- (c)  whether  the  Government  is  planning  to  introduce  app-based rental taxi services, if so, the details thereof; and
- (d) the details of welfare measures provided to drivers of app-based cab services by the companies that run these services?

## ANSWER

THE MINISTER OF ROAD TRANSPORT AND HIGHWAYS (SHRI NITIN JAIRAM GADKARI)

(a) & (b)     The Government has issued Motor Vehicles Aggregators Guidelines, 2025 for aggregators, including app based cab services, providing a light-touch regulatory system, while attending to issues of safety and security of the user and the welfare of the driver.   The competent authority for issuing licences to such aggregators is the designated  authority  of  the  concerned  State  Government,  with jurisdiction across the entire State.

Apart from the safeguards for the passengers, the Guidelines provide for fare regulation under Clause 17. Understanding that the fare  is  determined  by  market  forces  of  demand  and  supply  of  the aggregated  vehicles,  the  Guidelines  envisage  dynamic  pricing, allowing  aggregators  to  charge  50%  lower  than  the  State  notified base  fares  and  capping  the  maximum  surge  pricing  at  twice  the transparency, accountability and passenger welfare, the fare notified by the State base fare for peak hours. In order to ensure shall be the base fare.

The drivers' owned motor vehicle shall receive at least 80% of the fare and on the other hand for motor vehicles which are owned by the aggregator, the on-boarded driver shall receive at least 60% of the fare. Therefore, in case of surge pricing, the beneficiary will be the driver of the owned vehicle. This will spur supply and thereby enable better availability during periods of high demand.

The  Guidelines  provide  for  suspension  and  cancellation  of Aggregator license on several grounds of violation including unjustified fare/ dynamic fare charged to the passengers.

The  Guidelines  ensure that  no  passenger is charged for dead mileage, except when the distance for availing the ride is less than three (3) kilometers, and the fare is charged only from the point of origin to the destination.

- (c)        A  mobile  based  application  namely  Bharat  Taxi  App,  to support driver-owned taxi service on a cooperative model under the aegis of Sahahkar Taxi Cooperative Limited (STCL), is in the testing and trial phase.
- (d)       Following provisions relating to welfare measures for drivers have been included in the Motor Vehicles Aggregators Guidelines,
- 2025:
- i)        Insurance, Safety & Social Security Benefits
- a.  Minimum  ₹5  lakh  health  insurance  for  every  driver  (to be increased annually).
- b. Mandatory ₹10 lakh term insurance per driver (to be increased annually).
- c. Social Security Code, 2020 to override insurance structure once fully notified.
- d.  Medical fitness test, eye check-up &  psychological fitness assessment required before onboarding.
- e. Police  verification  mandatory  before  onboarding  which enhances personal & legal safety.
- f.   Drivers must sign written contracts in local language.
- ii)       Income Protection & Fair Payment
- a.  At least 80% of fare shall go to the driver onboarded with vehicle. For aggregator-owned vehicles, driver shall get minimum 60%.
- b.  For  other  cases,  payment  share  shall  be  governed  by agreement with aggregator ensuring transparency.
- c.    Where  fare  has  not  been  fixed  by  State  Government, aggregator may notify base fare to the State Government. This transparency ensures fair earnings.
- iii)       Training & Skill Development
- a. Mandatory  Induction  Training  Programme  for  all  drivers before onboarding.
- b. 40-hour  Induction  Training  covering  App  usage,  traffic rules,  first-responder  training,  road  safety,  behaviour,
- gender sensitivity, Divyangjan sensitivity, vehicle knowledge, etc.
- c. Training structure shall be published online by aggregator for transparency.
- d.   Annual Refresher Training Programme for all drivers.
- e.  Low-rated drivers (below 5 th percentile) to undergo quarterly refresher training to continue operating.
- iv)    Protection from Unfair Treatment / Safe Working Environment
- a. Drivers  cannot  be  forced  to  work  exclusively  for  one aggregator.
- b. Complaint-based  enquiry  to  be  completed  in  3  days which protects against arbitrary action.
- c. Aggregator must ensure valid permits for all vehicles preventing legal risk for drivers.
- d. Zero-tolerance policy for alcohol/drug use ensuring professional safety & protection
- e. Aggregators can face suspension/cancellation for failure to protect driver safety & welfare.
- v)        Digital Records & Transparency
- a. Aggregators must maintain digital record of driver documents,  banking  details,  emergency  contacts  for support.
- b    Fare-share  transparency  in  App/website  which  avoids payment disputes.

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