New Delhi, Nov 13: The Ministry of Road Transport and Highways has proposed changes to the Rent a Cab framework to make it easier for businesses to enter the rental market, simplify licensing and improve passenger safety. The proposed reforms aim to create more opportunities for small operators while providing customers with greater choice and better services.
A key proposal is to reduce the minimum fleet requirement from 50 vehicles to just five, allowing smaller businesses and new entrepreneurs to enter the sector. Operators will also be permitted to offer rental vehicles with or without drivers. The existing requirement to maintain branches in five tourist cities is proposed to be removed.
The ministry has also proposed introducing a single electronic licence valid across the respective State or Union Territory, replacing the existing system of separate main and branch licences. Approved operating locations could include airports, railway stations and bus terminals, making rental services more accessible to travellers.
To speed up business operations, the proposed framework sets a 60-day timeline for granting and renewing licences. Applications for adding or removing vehicles and operating locations will also benefit from a 30-day deemed-approval mechanism. Electronic records through the VAHAN system and automatic data retrieval are expected to reduce paperwork and compliance requirements.
Passenger safety and service quality are also central to the proposed changes. Rental vehicles will be required to have location-tracking systems and first-aid kits, while operators must provide websites, round-the-clock grievance support, emergency repair services and towing assistance.
The reforms also address driver welfare and operator accountability. Drivers provided by operators will require police verification, while their welfare will be covered under the Code on Social Security, 2020. The proposal also includes provisions to reduce licence validity in cases involving specified serious offences.
To ensure fair enforcement, operators will be given an opportunity to correct minor violations before authorities consider suspending or cancelling their licences. An appeal mechanism, including electronic hearings, has also been proposed.
The proposed changes are expected to benefit cab rental companies, small entrepreneurs, drivers and passengers. By reducing entry barriers and simplifying regulatory procedures, the reforms could encourage more businesses to enter the market, create employment opportunities and improve access to rental mobility services.
The proposals also aim to strengthen the balance between business growth, passenger convenience and road safety, supporting a more accessible and competitive cab rental industry across India.
