New Delhi, November 13 (TNA) The Ministry of Road Transport and Highways has proposed a major overhaul of rules governing cab rental businesses, seeking to simplify licensing, lower entry barriers for smaller operators, and strengthen passenger safety. The draft Rent-a-Cab Scheme, 2026, is intended to replace the existing framework introduced in 1989.
Under the proposed reforms, operators will be allowed to offer cabs with or without drivers, expanding rental choices for passengers. The minimum fleet requirement will be reduced from 50 to five vehicles, with at least two cabs per place of operation. The requirement for branches in five tourist cities has been removed.
Single Electronic Licence
The reforms propose a single electronic licence, valid across the State or Union Territory for a uniform fee, replacing the earlier system of separate main and branch licences. The licence fee is proposed at Rs 25,000, irrespective of fleet size or number of operating locations.
Approved places of operation may include airports, railway stations and bus terminals. Licence grants and renewals will have a proposed 60-day timeline, while adding or removing cabs or places of operation will follow a 30-day deemed-approval mechanism.
Digital Compliance Through VAHAN
To simplify compliance, the proposal includes electronic VAHAN registers and automatic retrieval of vehicle data. This is expected to reduce paperwork and make it easier for operators to manage fleet records and regulatory requirements. The move is part of a broader effort to digitise licensing and operational compliance in the road transport sector.
Passenger Safety Measures
Passenger safety will be strengthened through mandatory location-tracking devices and first-aid kits in cabs. Child restraint systems will be permitted as an optional facility. Operators will be required to provide round-the-clock grievance support, emergency repairs and towing services. These provisions are aimed at improving the overall passenger experience and ensuring quicker response in case of emergencies.
Driver Verification and Licence Validity
The proposed reforms state that operator-provided drivers will require police verification. In cases of specified serious offences, the operator’s licence validity may be reduced. Operators will also be given an opportunity to rectify non-material violations before suspension or cancellation of their licences is considered. This is intended to ensure a balance between enforcement and ease of doing business.
Expected Impact
The Ministry said the proposed reforms will expand rental choices for passengers, improve safety and lower entry barriers for smaller businesses, creating more employment opportunities. The draft scheme is expected to come into force from January 2027.