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The government has initiated the process to regulate the country’s unmonitored ride-hailing industry, proposing fare ceilings for both two-wheelers and four-wheelers.

The Ministry of Physical Infrastructure and Transport (MoPIT) has prepared a draft of the Digital Mobility Operation Related Standards 2026, which sets maximum fares for ride-hailing services. According to the draft, two-wheeler ride-hailing services would be capped at Rs 25 per kilometer, while four-wheelers would be limited to Rs 55 per kilometer.

“The service provider can charge a minimum fare of two kilometers for any shorter distance requested by passengers,” the draft regulation states.

The proposed rules also offer flexibility, allowing service providers to levy an extra charge of up to 20 percent during nighttime, adverse weather conditions, or trips to remote locations where passengers are not readily available. Additionally, app-based service companies may take a maximum of 10 percent of the fares charged by drivers.

The push for regulation follows years of legal pressure. In February 2020, the Patan High Court directed the government to oversee ride-hailing services. In January last year, the Supreme Court reiterated the need for fast-track legislation, stressing the urgency of bringing the sector under legal oversight.

In 2023, the government amended the Industrial Enterprises Act to formally recognize ride-sharing platforms as legal business entities. However, the absence of clear regulations has left service providers, riders, and consumers facing issues ranging from inconsistent pricing to safety concerns.

The draft also seeks to standardize electric vehicles used for ride-hailing, stipulating that a motor’s peak power must be at least 1.5 kW and its maximum speed must exceed 40 km per hour. “Operators of ride-sharing must have completed one year of obtaining a driver’s license, and vehicles that are 15 years old cannot be used to provide service,” the draft adds.

To operate a digital mobility service, permission must be obtained from the Department of Transport Management. The federal government has clearly distinguished between ride-sharing and ride-hailing, each with different standards, noting that many services currently operate under the name of ride-sharing.

According to the standards, ride-sharing is defined as a transport service aimed at increasing vehicle utilization efficiency, reducing costs, and lessening traffic congestion and environmental impact by arranging for multiple passengers with the same destination or route to travel together via a digital platform.

In contrast, ride-hailing refers to a service where passengers request a vehicle with a driver for private use through a digital platform, with payment, tracking, and service management handled in direct coordination with the provider.

Vehicles used in ride-hailing services must obtain an operating permit from the provincial office specifying the purpose. However, this permit is not considered mandatory for ride-sharing services.