Ministry of Road Transport Proposes Reforms to Simplify Cab Rental Business Regulations and Enhance Passenger Safety

The Ministry of Road Transport and Highways has proposed reforms to make cab rental businesses easier to start and operate, expand rental choices and strengthen passenger safety. The proposed framework combines simpler procedures with better customer support.

Easier Entry and Greater Rental Choices
- The Ministry of Road Transport and Highways has proposed reforms to simplify the establishment and operation of cab rental businesses.
- Operators will be permitted to offer cabs with or without drivers.
- Minimum fleet requirement reduced from 50 cabs to just 5 cabs.
- A minimum of two cabs will be required at each place of operation.
- The mandatory requirement to maintain branches in five tourist cities will be removed.
- The reforms aim to encourage more operators and expand customer choices.

Single Electronic Licence
- A single electronic licence will replace separate main and branch licences.
- The licence will be valid across the respective State or Union Territory.
- A uniform licensing fee will apply.
- Approved operating locations may include:
- Airports.
- Railway stations.
- Bus terminals.
- Other approved locations.

Faster Licensing and Approvals
- Proposed timeline of 60 days for granting and renewing licences.
- A 30-day deemed-approval mechanism will apply to requests for adding or removing cabs and places of operation.
- The measures aim to reduce administrative delays and simplify business operations.

Reduced Paperwork and Digital Compliance
- Electronic registers through the VAHAN platform will simplify record-keeping.
- Automatic data retrieval will reduce repetitive documentation.
- Digital processes will improve transparency and administrative efficiency.

Enhanced Passenger Safety
- Mandatory location-tracking facilities in cabs.
- Child restraint systems will be optional.
- First-aid kits must be provided in vehicles.
- Operators will be required to provide:
- A dedicated website.
- 24-hour grievance redressal support.
- Emergency repair assistance.
- Towing services.

Driver Welfare and Accountability
- Police verification will be mandatory for drivers provided by operators.
- Driver welfare provisions will be aligned with the Code on Social Security, 2020.
- Specified serious offences involving a cab or an operator-provided driver may result in a reduction in the operator's licence validity.
- The provisions aim to strengthen accountability and improve passenger confidence.

Fairer Enforcement and Appeals
- Operators will receive an opportunity to correct non-material violations before suspension or cancellation of licences is considered.
- An appellate mechanism will be introduced.
- Electronic hearings will make the appeals process more accessible and convenient.

. Benefits for Passengers – Ease of Living
- Greater availability of rental vehicles.
- More choices of self-drive and chauffeur-driven cabs.
- Improved passenger safety measures.
- Round-the-clock grievance support.
- Better emergency assistance during journeys.

Benefits for Businesses – Ease of Doing Business
- Lower minimum fleet requirements.
- Simplified licensing procedures.
- Reduced paperwork and compliance costs.
- Easier expansion to new operating locations.
- Greater opportunities for small businesses and entrepreneurs.
- Potential for increased employment generation.