New Delhi, Nov 13: The Ministry of Road Transport and Highways has proposed a series of reforms to the Rent-a-Cab framework aimed at making it easier to start and operate car rental businesses, widening passenger choices and strengthening safety standards.
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The proposed changes seek to reduce licensing requirements, simplify regulatory procedures and introduce stronger customer support and accountability measures. By lowering entry barriers for operators, the government also aims to encourage smaller businesses and create fresh employment opportunities in the transport sector.
Minimum fleet requirement cut from 50 to five vehicles
One of the major proposed changes is a reduction in the minimum fleet requirement from 50 cabs to just five. Operators would, however, need to maintain at least two cabs at each place of operation.
The revised framework would also allow operators to offer vehicles with or without drivers, giving customers greater flexibility in choosing rental services.
Additionally, the existing requirement for operators to establish branches in five tourist cities is proposed to be removed, making it easier for businesses to enter the sector.
Single licence to replace multiple approvals
The Ministry has proposed introducing a single electronic licence valid across the respective State or Union Territory for a uniform fee. This would replace the existing system of separate main-office and branch licences.
Approved places of operation could include airports, railway stations and bus terminals, potentially improving access to rental services at major transport hubs.
To make the approval process more predictable, the proposed framework sets a 60-day timeline for granting and renewing licences. Applications to add or remove vehicles or places of operation would be covered by a 30-day deemed-approval mechanism.
Digital records to reduce paperwork
The reforms also seek to simplify compliance through electronic records maintained on the VAHAN platform and automatic retrieval of relevant vehicle information.
The move is expected to reduce repetitive documentation and make licensing and regulatory procedures more efficient for both operators and transport authorities.
Passenger safety and round-the-clock support
The proposed framework places emphasis on passenger protection and service quality. Rental cabs would be required to have location-tracking facilities and first-aid kits, while child restraint systems would be optional.
Operators would also be required to maintain a website and provide 24-hour grievance redressal support. Emergency repair and towing assistance would form part of the proposed service obligations.
Driver verification and accountability provisions
For drivers provided by operators, police verification would be mandatory. The framework also links driver welfare to the provisions of the Code on Social Security, 2020.
In addition, specified serious offences involving a cab or an operator-provided driver could lead to a reduction in the operator’s licence validity, introducing stronger accountability within the rental service sector.
Fairer enforcement and electronic appeals
The proposed reforms also seek to make regulatory action more proportionate. Operators would be given an opportunity to rectify non-material violations before authorities consider suspension or cancellation of their licences.
An appellate mechanism, including provisions for electronic hearings, is also proposed to make the process of challenging regulatory decisions more accessible.
Reforms aimed at improving ease of doing business
The Ministry said the proposed changes are intended to benefit renters, cab operators, drivers and State and Union Territory transport authorities.
For passengers, the measures could mean more rental options, improved safety arrangements and access to round-the-clock assistance. For businesses, reduced fleet requirements, simplified licensing and digital compliance could make market entry easier, particularly for smaller operators.
The proposed framework will require effective oversight by State and UT transport authorities, supported by electronic licensing and VAHAN-based records.
Overall, the proposed Rent-a-Cab reforms seek to create a more accessible, digitally enabled and passenger-focused rental transport ecosystem while encouraging entrepreneurship and improving service standards.