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The Ministry of Road Transport and Highways has released the Motor Vehicle Aggregator Guidelines (MVAG), 2025, updating the 2020 norms to accommodate evolving urban transport trends — including bike taxis, electric vehicles (EVs), and app-based autorickshaws.

Overview

• Legal Basis: Formulated under the Motor Vehicles Act, 1988, MVAG provides the regulatory foundation for digital ride-hailing platforms such as Ola, Uber, and Rapido.
• Issuing Authority: Ministry of Road Transport and Highways, Government of India

Key Provisions of MVAG 2025

Driver Welfare and Remuneration

• Revenue Sharing:
  • Drivers using own vehicles must receive minimum 80% of the fare.
  • For aggregator-owned vehicles, the share must be at least 60%.
• Insurance Requirements:
  • Health cover of ?5 lakh
  • Term life insurance of ?10 lakh for each driver
• Skill Enhancement: Drivers in the lowest 5% rating bracket to undergo quarterly training

Passenger Safety and Accountability

• Travel Insurance: Mandatory coverage of ?5 lakh per passenger
• Complaint Resolution:
  • Issues must be addressed within 3 working days
  • Aggregators must notify passengers of outcomes
• Fare Transparency: Charges apply only from pick-up to drop-off location

Fare Regulation and Surge Pricing

• Base Fare Governance: State governments to decide base fare for each vehicle type
• Dynamic Pricing Limits:
  • Aggregators may charge as low as 50% below base fare or up to 2x the base fare cap
  • Designed to curb excessive surge pricing and ensure fare predictability

Cancellation Penalties

• Symmetrical Accountability:
  • 10% penalty (capped at ?100) for riders or drivers cancelling without valid reason
  • Acceptable cancellation grounds must be clearly listed on platforms

Legitimisation of Bike Taxis

• Policy Recognition:
  • For the first time, private two-wheelers (non-transport motorcycles) may be used for commercial ride services, pending state-level approval
  • Legal clarity for platforms operating in regulatory grey zones

EV Integration and Inclusivity

• EV Adoption Targets: States may enforce annual targets for aggregator fleets to switch to electric vehicles
• Accessible Vehicles Mandate: Aggregators must include vehicles equipped to serve persons with disabilities (Divyangjan)

Enhanced Driver Onboarding Standards

• Screening and Health Protocols: Mandatory police verification, medical fitness, and psychological evaluation before onboarding
• Training Mandates: Induction training for new drivers and annual refresher programs for all

Grievance Redressal & Licensing

• Mandatory Officer Appointment: A Grievance Redressal Officer must be designated with contact details published on the platform
• Centralised Licensing Portal: A unified digital portal to streamline aggregator licensing, renewals, and deposit management

Enforcement and Penalties

• Penalty Range: Fines for non-compliance range from ?1 lakh to ?1 crore
• Escalation for Repeat Offences: Repeat violations can lead to license suspension (up to 3 months) and possible revocation

Significance of MVAG 2025

• Aligns India’s mobility ecosystem with sustainable transport goals, passenger safety, and driver welfare
• Encourages EV transition, inclusive access, and regulated digital transport economy
• Brings regulatory clarity for emerging services like bike taxis