In a Major step aimed at improving user experience and accountability, ride-hailing platforms such as Uber, Ola, and Rapido will now be required to compensate passengers if their booked rides are cancelled by drivers, starting May 1, 2025.
This rule comes as part of the updated Motor Vehicle Aggregator Guidelines 2020, enforced by the Ministry of Road Transport and Highways (MoRTH). The regulation intends to manage the growing frustration among commuters over frequent last-minute ride cancellations by drivers, which often result in delays, inconvenience, and fare hikes.
As per the new policy, passengers will be allowed to compensation if a confirmed booking is cancelled by the driver without valid reason. While the exact amount of compensation may vary depending on the platform and region, sources indicate it could be in the range of ₹100 or more per cancelled ride, credited directly to the rider’s wallet or bank account.
The government had previously issued a warning to ride- sharing aggregators over increasing consumer complaints. Now, with this formal rule in place, companies will be expected to adopt more transparent cancellation policies and improve driver compliance.
A senior transport official said, “This step is meant to protect consumer rights and ensure ride-sharing services operate with greater fairness. It also motivates drivers to honor confirmed bookings.”
This rule also mandates that platforms must disclose cancellation charges, waiting time costs, and surge pricing transparently in the app before ride confirmation.
The move has been largely welcomed by passengers, especially in metro cities where last-minute cancellations are a daily issue. However, some driver unions have expressed concerns, citing operational and safety issues.
The ride-hailing platforms are expected to update their terms of service, and notify users via in-app messages and emails before May 1.
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