Chandigarh: Soon, policy to regulate fares of app-based cabs

Hindustan Times

24-06-2025

In a move aimed at regulating the operations of around 8,000 app-based cabs plying in the city, the UT administration is all set to roll out the 'Chandigarh Administration Motor Vehicle Aggregator Rules, 2025'. The final draft of the rules is ready and an official notification is expected within a week. (HT File)
The final draft of the rules is ready and an official notification is expected within a week.
Once notified, cab aggregators will have to adhere to the regulatory framework and fare structure. Fares will be indexed to the current year's Wholesale Price Index (WPI), which will serve as the minimum charge for customers, and be revised periodically.
To account for the operational costs, the rules specify a minimum fare for the first three kilometres so as to compensate for dead mileage – the distance the vehicle travels without a passenger to reach the rider's pick-up location – and fuel consumption. The customer will, however, not be charged for dead mileage unless the ride originates with a three-kilometre distance. They will pay only from the point of boarding to the point of alighting.
Aggregators will be allowed to use dynamic pricing, wherein fares are permitted to drop up to 50% below the base fare, and surge up to 1.5 times of the base fare during peak demand hours. Under the revenue-sharing model, drivers will receive at least 80% of the total fare, while aggregators will retain the remaining 20%. Taxes imposed by the Central or State government, including GST, is to be borne by the aggregator.
These regulations will apply only to motor cabs under four metres in length with engine capacities below 1500cc (petrol or diesel). Electric vehicles will be exempt from these fare caps to encourage green mobility.
The rules also empower the administration to collect 2% of the fare from each ride for state-run amenities and programmes. These include pollution-control initiatives, driver welfare schemes, road-safety workshops, dedicated parking spaces, and EV infrastructure development.
The rules also explicitly prohibit the use of private vehicles for cab services, as was observed in some cases.
To prevent arbitrary cancellations, drivers cancelling a ride without a valid reason after accepting it on the app will face a penalty of 10% of the fare, capped at ₹ 100. Riders who cancel a booking will also face an identical penalty.
The state licensing authority has been vested with powers to ensure aggregator compliance. It can demand documents, inspect aggregator premises, and investigate repeated driver off-boarding cases, with prior written notice. Confidentiality of all information gathered during such investigations will be strictly maintained.
A senior officer of the state transport authority (STA) said the rules have been finalised and we are hopeful that they will be notified within a week's time, officers said.