Cab Aggregators in Maharashtra Must Pay Riders for Driver Cancellations; Surge Pricing Capped Under New State Policy

Mumbai, 30th April 2025: Drivers cancelling confirmed cab bookings will now have to pay a penalty, which will be directly credited to the affected commuter’s account, as per Maharashtra’s newly approved Aggregator Cabs Policy, 2025. The state cabinet gave its nod to the comprehensive set of rules on Tuesday, aimed at protecting both consumers and drivers in the fast-growing app-based taxi industry.

The policy sets strict limits on fare hikes and cancellation penalties. Aggregators like Uber and Ola can no longer impose surge pricing beyond 1.5 times the standard fare, which is regulated by the state. Additionally, any discounts offered by the platforms cannot exceed 25%.

“Until now, fares would spike up to five times during peak hours or rain, with some passengers paying over ₹1,500 for short distances,” said State Transport Commissioner Vivek Bhimanwar. “This will no longer be allowed. The new policy mandates a cap on surge pricing, both day and night, at 1.5x the government-approved base fare. App algorithms must be updated accordingly.”

In a significant shift from earlier practices, the penalty for ride cancellations by drivers will not be absorbed by the platform or ignored—it will now be credited directly to the commuter. “So far, it was only riders who faced fines for cancelling. Now, drivers who cancel after accepting a ride will also be penalized,” Bhimanwar added. The transport department is expected to issue formal instructions to aggregator companies to implement this in their mobile apps.

The policy stems from Supreme Court directives that prompted the formation of a special committee led by Sudhir Kumar Srivastava. Based on the panel’s recommendations and the provisions of the Motor Vehicles Act, the new framework addresses safety, fare regulation, and driver accountability.

Safety norms have also been tightened. “For women opting for ride pooling, the rule is very clear—only female drivers and co-passengers will be permitted,” said a senior transport official. “This is aimed at ensuring comfort and security for women riders.”

The policy also introduces safeguards for drivers. Aggregator platforms are now required to share at least 80% of the fare amount with the driver, a move designed to reduce fare refusals and increase driver satisfaction.
“Drivers often refuse rides because their earnings are low after commission cuts,” the official explained. “Now, with a guaranteed 80% share, the incentive to accept more rides increases.”

Driver performance will be closely monitored through passenger ratings. “If a driver’s rating drops below 2 out of 5, they will be required to attend a mandatory training program,” the official added. These sessions will be held at designated training centres. The policy also makes police verification and background checks compulsory for all drivers and mandates an in-app emergency contact option for users.

While cab aggregator companies have yet to publicly respond to the policy, officials confirmed that a separate set of detailed operational guidelines will be released to ensure smooth implementation.